Service tax on cutting & folding contractor

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This query is : Resolved

VIKKI SINGHVI (Querist)

12 January 2013 My one assessee is a contractor of cutting & folding. He has gross receipts of around Rs. 11.50 lacs in FY 2012-13. So whether he is liable to pay service tax?

srinivasan

srinivasan (Expert)

12 January 2013 Your query needs to be more eloborative explaining the activity mentioned of the contractor in detail.

One has to first find out whether the activity of cutting and folding amounts to manufacture. If so, the activity will fall under the excise purview and not under service tax.

Similarly if the contractor is taking a intermediary job work for an manufacturer whose final product is subject to excise, he can calim the exemption of the same as per the mega notification.

But with clarity in your query the position can be firmed up

VIKKI SINGHVI

VIKKI SINGHVI (Querist)

13 January 2013 Neither the activity of contractor is subject to excise nor the manufacturer's product. The contractor's job is to get cutting & folding of traders's cloth from his (contractor's) staff of people. This cloth will be traded in the market & not for manufacturing any product.

srinivasan

srinivasan (Expert)

15 January 2013 His activity in this case is liable to service tax. Earlier it would fall under business support services and now it will continue to be taxes. There is no change in the position of taxation of this activity due to the ammendment in July 12.

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