Is service tax is applicable on stiching of readymade garmen

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seema (Querist)
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27 September 2013 Hello My client is doing job work. (stitching of garments) He receive material from manufacture and sometime purchase from market as per specification of manufacture then do stitching and other work and send them to manufacture. Sometime he also put label as per manufacture requirement. He receive his job work charges from manufacture. My queries are 1 Is there any excise duty liability on my client or excise duty liability on manufacturer. 2 Is there any service tax liability? If yes then who will collect the service tax and on what amount?

CA Suresh Jain

CA Suresh Jain (Expert)
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28 September 2013 since, process of making readymade garments carried out by your client is a process of manufacture/production, your client is not liable for service tax.

2. The ready made garment are exempted from payment of excise duty if CENVAT credit is not taken

disclaimer- all answers are given as per the facts narrated by you. Answer may differ after study of full facts/statements/agreements etc. involved in the case

seema

seema (Querist)
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28 September 2013 Thank you sir
In the above question is there any applicability of VAT and CST?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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29 September 2013 Yes. CST/VAT will apply.

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CA Suresh Jain

CA Suresh Jain (Expert)
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29 September 2013 Mr. Nikhil is right. The VAT and CST is a Work Contract as per VAT laws

disclaimer- all answers are given as per the facts narrated by you. Answer may differ after study of full facts/statements/agreements etc. involved in the case

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seema

seema (Querist)
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21 November 2013 hello sir
thanks for reply
We don't sale any material while stitching except threads, buttons etc. So how will we cover under work contract?
Please explain me

CA Suresh Jain

CA Suresh Jain (Expert)
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21 November 2013 There would be a suittable provision in the state's VAT law

Nikhil Kaushik

Nikhil Kaushik (Expert)
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21 November 2013 Dear Seema,

what you can do is that (on paper) you only charge for services and let buttons and threads be shown as received from the customer itself.

I would request other indirect tax experts to kindly comment on this.

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