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Querist : Anonymous

Querist : Anonymous (Querist)

06 June 2011 Suppose a manufacturer "A" purchase garments & further give it to "B" for processing & B gave it back to A after completing the work & then A consumes the garment himself. What will be the implications of Excise & Service Tax ? And who will be liable to pay Excise & Service Tax.

Ram Avtar Singh

Ram Avtar Singh (Expert)

06 June 2011 its called captive consumption a is liable o pay excise duty.and service tax. B will charge only labor charges .

Querist : Anonymous

Querist : Anonymous (Querist)

06 June 2011 Sir thanks for ur valuable opinion but want to know A will pay excise thats ok but will B charge service tax on his labour charges.

Pankaj Gandhi Jaiswal

Pankaj Gandhi Jaiswal (Expert)

06 June 2011 A will send material alongwith Annexure IV otherwise B has to charge Excise on Job charge+material value. If annexure IV is attached then B will charge only service tax on labor charges. Please note that when in 1st case without having Annex IV B will consider material value only for excise calculation and not for accounting purpose

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