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Discussion > Service Tax > Queries >

service tax on fabrication work

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chartered accountants


[ Scorecard : 35]
Posted On 16 March 2011 at 19:57 Report Abuse

Sir, our client was provided fabrication and erection & installation services to his client for foundation of thermal plant. He is having work order mentioning both the item. wherther service tax is applicable on fabrication work. Please provide the details.

thanks in advance


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Devendra
M.COM CA Final [Group 2- Cleared] CS Professional


[ Scorecard : 4446]
Posted On 16 March 2011 at 21:32

Dear Vishnu,

 

1) Service Tax is applicable on Erection & Installation Services as per section 65(105) (zzd) of the Service Tax Act, 1994. Service Tax to be levied when the Gross Receipts go above the specified limit (ie Rs. 10 Lacs)

 

2) But no service tax is applicable on Fabrication work.

 

Regards,

Devendra





Nirav Worah
CHARTERED ACCOUNTANT


[ Scorecard : 377]
Posted On 17 March 2011 at 12:45

Fabrication is a manufacturing activity and hence no servcie tax is leviable.




CA Saiyum khan
Practicing CA


[ Scorecard : 675]
Posted On 17 March 2011 at 19:50

I believe that Fabrication is an activity for erection and installation hence service tax needed to be charged.




vishnu
chartered accountants


[ Scorecard : 35]
Posted On 17 March 2011 at 21:23

Thank You Devendra, Nirav and Saiyumkhan. I need some notification or case law or any other material for not applicable of service tax on fabrication. I think fabrication is separate from errection, commissioning and installation services.




U S Sharma
glidor@gmail.com


[ Scorecard : 19381]
Posted On 17 March 2011 at 21:31

as fabrication is a contract to build the goods as per the design/ sample/ drawings provided by the party, so it will be taxed under works contract. 

 

remember if the fabricator does not pay service tax then it would amount to manufacture and excise would be leviabl on materials + job charges



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