TaxTMI 
TaxTMI 
JOB WORKS OF ALCOHOLIC BEVERAGES NOT LIABLE TO SERVICE TAX
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....OB WORKS OF ALCOHOLIC BEVERAGES NOT LIABLE TO SERVICE TAX<br>By: - Dr. Sanjiv Agarwal <br>Goods and Services Tax - GST<br>Dated:- 27-8-2022<br><br>In one of the recent important rulings, Service Tax Tribunal had come to conclusion that blending, bottling, labeling and packaging in relation to Indian Made Foreign Liquor (IMFL) can not be treated as a taxable service, viz, business auxiliary service....
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.... and therefore, made liable to payment of Service Tax. The Tax Tribunal, CESTAT has pronounced this judgment on 27.07.2022 in the matter pertaining to demand of Service Tax in a Revenue Appeal in COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, BHUBANESWAR-I VERSUS M/S. HI-TECH BOTTLING PRIVATE LIMITED - 2022 (8) TMI 62 - CESTAT KOLKATA It implies that the companies engaged in carrying out job work ....
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....of blending, bottling, labeling and packaging of IMFL shall not be considered as business auxiliary service and taxed as such to service tax. Such services are not taxable under GST regime too. In the instant case, there was a demand of tax to the tune of about rupees one crore which got dropped at adjudication stage but revenue preferred an appeal. It was contended that the adjudicating authorit....
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....y has erred in holding that the activity of blending, bottling, labeling etc. of Indian Made Foreign Liquor (IMFL) by the assessee, amounted to manufacture as defined under Section 2(f) of the Central Excise Act, 1944 and consequently dropping the entire demand. As per the agreement, the assessee did the job work for the main manufacturer and had raised the bills of different charges / expenses s....
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....uch as bottling charges, manufacturing charges etc. incurred by them for production of IMFL on behalf of clients and were paid also. They acted throughout under instruction and vigil of the service receivers for production of IMFL. Assessee has no control over prices of IMFL products which use to be determined by the clients who are actual owner of the IMFL products. Assessee had raised bills of d....
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....ifferent charges/expenses such as bottling charges, manufacturing charges etc. incurred by them for production of IMFL on behalf of clients and had been paid also. It was decided that if the Contract Bottling Unit (CBU) undertakes complete process of manufacture of alcoholic beverage under the 'contract bottling arrangement' as described above, then such activity would not fall under the taxable ....
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....service, namely the Business Auxiliary Services. However, in case the activity undertaken by the CBU falls short of the definition of manufacture (such as activity of 'packing' or 'labelling' alone), then such activity would fall within its ambit and would be charged to service tax. The Tribunal found no reasons to interfere with the original order and dismissed the appeal filed by Revenue. Thoug....
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....h the matter pertains to service tax, it gains importance as many such cases are still pending before various forums. Under the present Goods and Services Tax (GST) regime, manufacture of alcoholic liquor meant for human consumption has been kept out of scope of GST itself, being a State subject. It can therefore, be concluded that manufacture of alcoholic beverages meant for human consumption can....
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.... not be taxed to service tax as also GST in its present form.<br> Scholarly articles for knowledge sharing by authors, experts, professionals ....