Applicability of vat or service tax

This query is : Resolved

shubham jain (Querist)
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23 October 2016 Dear Sir,

One of our client is engaged in printing business. i.e printing on clothes like shirt, T shirt, Ladies Top, Kurties etc .

The process is other party gives cloths to our client, client prints on it, and gives it back to the other party, the other party will stich it and sell it in the market.

Our client just do printing and gives it back, so what will be applicable in this case VAT or Services Tax???

Please Suggest

Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
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23 October 2016 Answer is Yes. Based on 2 reasons:
1. It is not coming under the Negative list
2. Section 65(43) of Finance Act 1994 covers it under Fashion Desigining as "Creating Designs for Clothing Accessories"

Please note that there are some conflicting opinions on this on various forums, but my opinion is that it is chargeable to Service Tax. Please check these links:
https://www.caclubindia.com/experts/is-service-tax-applicable-for-tailoring-business-1089234.asp#.UTbANaNr_BE
https://www.caclubindia.com/experts/service-tax-on-tailoring-charges-366840.asp#.UTbANaNr_BE
https://aviratshiksha.wordpress.com/2012/09/10/service-tax-applicability-on-tailoring-stitching/

shubham jain

shubham jain (Querist)
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24 October 2016 sir ,
but its exempt under entry 30 of mega exemption.

Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
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24 October 2016 You mean "textile processing"?

shubham jain

shubham jain (Querist)
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24 October 2016 as a job work processing

Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
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24 October 2016 Well, if you want to take that route... then maybe.. but I dont see any "processing" in the your job work. I suppose that is mainly for textile processing such as yarn to gray goods and gray goods to finished goods, etc. That is what is called processing in textile industry.

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