St for labor bill

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Babu (Querist)
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07 February 2012 Company manufacturing Aluminium Alloy Ingots using scrap as raw material, also doing conversion work for third paties ex: collecting scrap and deliver as ingots ( again Raw material for scrap supplied comp. ) after conversion, for this conversion company raising Labor bill. For this labor bill service tax is applicable or not?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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08 February 2012 yes. It will attract Service tax unless the process not covered under definition of Manufacture as follows

2(f) “manufacture” includes any process,-
(i) incidental or ancillary to the completion of the manufactured product;
(ii) which is specified in relation to any goods in the section or Chapter Notes
of the first schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as
amounting to manufacture; or
(iii) which in relation to the goods specified in the Third Schedule, involves
packing or repacking of such goods in a unit container or labeling re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer,

and the word “manufacture” shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account;

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