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Applicabilty and treatment of excise duty and service tax ?

kathiravan (erode) (99 Points)

25 June 2013

Hi friends, I need Clarification related to this issues,

One of our Client, Private Limited Company Manufacture “Chimneys ”(not kitchen Chimneys)

It contain 3 Stages

1.Steel work

2.Conical Work

3. Erection

1^st and 2^nd Stages manfured with in Factory , 3^rd Stage was in customer place.

Chimneys Size and Price was differ as per customer requirement.

I need clarification related to applicability of Point of Excise duty collected , value on excise duty ( In this valuation Erection Charges in included or not ), company supply all the matterals to job workers(Erection Group), her Service tax liablity is applicable or not?, while payment to job workers(Erection Group) TDS is liable to deducted, if yes , applicable section is 194C or 194J

Please Guide me Sir

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3 Replies

CA. Kuldeep Singhi (Entrepreneur) (424 Points)
Replied 25 June 2013

Bro the point of Collection of Excise duty is the place of Customer when the erection is complete & will include the value of erection charges also & as per exemption notification 25/2012 when the final product on which job work is done is dutiable then no need to charge service tax on it & yes TDS will be deducted while making the payment to job worker u/s 194C @ 1 or 2% as the case may be (TDS on payment made to Contractor)

kathiravan (erode) (99 Points)
Replied 25 June 2013

Thank you Mr.kuldeep.., Ur reply is too satified , now my another quaries is related to treatment of amount received for that cost of goods(chimneys) that is morethan 80 % of Amount reveived before erection start.., in that case such amount is treated as Advance ? becase invoice made only after erection..

main point we remember is ... such Advance Amount Received is used for manufacting of Chimneys ( that 2 Stage )

Suggest how it treatment of Accounting Procedure.

please guide me...