Service tax and vat on job work of galvanizing

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Samir Ghanchi (Querist)

21 September 2013 We have received Steel material from party for Galvanizing (Zinc Plating).

We use our labour and Zinc for completing the task, here both service and material is been used.

Now my query is
1.is the above process amounts to manufacture..??
2.If we can not bifurcate amount of service and material on what amount service tax and vat will be applicable..?? and what will be the rates for both..??

CA Suresh Jain

CA Suresh Jain (Expert)

21 September 2013 Yes, this is a process of manufacture.
Not, Liable to service tax.
VAT is according to the Rate Schedule of the state in which you are carrying on the work

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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Samir Ghanchi

Samir Ghanchi (Querist)

21 September 2013 Dear Sir,

Thanks for your reply,but what if the process does not amounts to manufacture..?

The work under taken is job work(Mentioned Under Notification no. 25/2012-Service tax,point no. 30 ) under which we provide only service of coating of Zinc on Steel material by using our own Zinc.

So, both service tax and VAT are attracted here.

Now on which amount Service tax and Gujarat VAT shall be attracted..??

CA Suresh Jain

CA Suresh Jain (Expert)

22 September 2013 Please refer to clause (f)of section 66 D which specifies that any process amounting to manufacture or production of goods is not a service. The Galvanising process with or without material is a process of manufacture and therefore out of the purview of Service Tax and therefore clause 30 of notification 25/2012 is irrelevant.

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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