Tyre Retreading - Is it under purview of Service Tax?

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Rajan (Querist)

12 November 2009 Hi,

Does Tyre Retreading come under the purview of Service Tax? I do for individuals and companies (No Contracts or Agreements).

If yes, then I have another question too:

I bill my invoices in whole without specifying in detail about the raw materials cost, labour cost, etc. And let us assume that total turnover is 15 lacs p.a. Now when i calculate exemption limit should i take the total turnover which includes cost of raw materials + 4% VAT which i pay when i purchase it or should it be calculated on the total turnover after deducting cost of raw materials?

Sridhar

Dayal

Dayal (Expert)

13 November 2009 tyre retreading is a case of works contracts

It is understood that the transaction is covered under WC ser tax involving Works contracts and in such cases you need to pay the service tax only on the value which is the balance of the total value minus the value on which you have already paid either sales tax/re-sale tax/VAT, as the case maybe, under the Works contract Act, which is in accordance with the Notification 12/2003!

Rajan

Rajan (Querist)

15 November 2009 Hi Dayal,

Thanks for reply to my query. But I have one more query relating to the earlier one itself.
1. Can I pay service tax using composition scheme @ 2% of the bill? If this is the case is there any option that i need not pay VAT (Tamil Nadu)?
2. Can i use the abatement option available under service tax (works contract) saying that 33% is service and pay tax for that 33% alone without showing any purchase bills?

RENGARAJ R.K

RENGARAJ R.K (Expert)

17 June 2012 In the current definition under valuation Rule 2A, the other works contract like repairs, maintenance, etc are covered and service tax is payable for 70% of such contract total value. This applies to tyre retreading service. Please check up the notification which comes into effect from 01.07.2012.

rengaraj r.k

RENGARAJ R.K

RENGARAJ R.K (Expert)