Work on raw material in factory premises

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This query is : Resolved

Deepak Kumar Jha (Querist)

12 October 2016 Dear Expert,

What any pvt Ltd company do work on raw material from outside Labour and get bill for it's work, What will be accounting ledger made and what will service Tax RCM will be alsoapplicable?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

12 October 2016 Book it under direct labour expenses. No service tax applicable being part of manufacturing activity.

Deepak Kumar Jha

Deepak Kumar Jha (Querist)

12 October 2016 Thanks sir,

What it will be come in manpower supply service which cover in RCM?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

12 October 2016 If you consider it as part of manufacturing activity and cost is considered for payment of excise duty no service tax payable on it.

Deepak Kumar Jha

Deepak Kumar Jha (Querist)

12 October 2016 Ok sir,

What PF & ESI will applicable on above activity?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

12 October 2016 PF and ESI is applicable on both own labour and on contract labour.
You are a manufacturing company, so any work done on raw material is part of manufacturing activity.

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