10 November 2007
EVERY SERVICE PROVIDER PROVIDING TAXABLE SERVICES UNDER THE SERVICE TAX ACT ( PRESENTLY THERE ARE 105 SERVICES UNDER THE ACT)HAS TO REGISTER UNDER THE ACT AND COLLECT THE SERVICE TAX AND DEPOSIT SAME AND FILE RETURNS HALF YEARLY. ACCORDINGLY IF THE POLISHING UNIT IS THE SERVICE PROVIDER PROVIDING TAXABLE SERVICES, THE UNIT IS LIABLE UNDER THE ACT. THE UNIT SUBCONTRACTING THE WORK ELSEWHERE DOES NOT MATTER . BUT THE REGISTRATION MAY BE DONE ONLY IF THRESHOLD LIMIT EXCEEDS RS. 7 LAKHS . THE EXEMPTION LIMIT IS RS. 8 LAKHS GROSS SERVICE RECEIPTS PER ANNUM. WHILE JOB WORKS DONE BY JOB WORKERS, JOB WORKS RESULTING IN MANUFACTURING ,PRODUCING/PROCESSING OF GOODS FROM INPUTS RECEIVED FROM MANUFACTURER AND RETURNED BACK TO MANUFACTURER FOR FURTHER PROCESSING ETC. ARE EXCLUDED FROM PURVIEW OF SERVICE TAX, SERVICES RELATING TO BUSINESS OUT SOURCING,PROCUREMENT OF INPUTS,(INPUTS MEANS ALL GOODS OR SERVICES INTENDED FOR USE BY CLIENT) PRODUCTION OR PROCESSING OF GOODS OR PROVISION OF SERVICES FOR AND ON BEHALF OF CLIENT ARE INCUDED IN THE PURVIEW OF TAXABLE SERVICES UNDER SERVICE TAX ACT UNDER SECTION 65 (19)UNDER BUSINESS AUXILIARY SERVICES WEF 01-07-2003 . R.V.RAO
12 November 2007
You are a service recepient from the individual.
The Onus of discharging the service tax will fall on the Individual.
However he can take the recourse of the threshold limit as stated my Mr. Rao.
If the individual is doing job work of polishing granite tiles wherein all inputs are provided by your firm for whom the job work is being done and if this amounts to Does this process amount to manufacture then service tax will not be applicable on this process.
You may evaluate your position in the matter accordingly
27 December 2007
It is a discussion issue that whether the contractor is liable to service tax or the sub contractor is liable when a part or whole of the contract is sub contracted. There is relationship of principal and agent between the contractor and sub contractor. The contractor enters into a contract with the service receiver. There is no relationship between the sub contractor and the service receiver. So accordingly the contractor can collect the service tax from the sub contractor and can avail the credit as input services. In brief the sub contractor is liable for the service tax if the taxable service exceeds rupees eight lakhs for the year 2007-2008
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