Dear Sir,
Please clarify my doubt. We are the Contractors of IOCL. We fabricate 20kl to 75 Kl Petrol and Diesel Tanks to IOCL. The Raw Material (Mild Steel) for Tanks Supplied to us by IOCL on Jobworks Basis without transfering the ownership of the material. According to their instructions using their material at our factory we fabricate the tanks as per their drawings using some consumables like Welding Electrodes and Turnbuckles and handover the finished Tanks to their Retail Outlet (Petrol Bunks) place which are ready for erection. The erection will be done by others not by us.
Right now we are treating as works contract tax and paying Works Contract Tax @ 5% and Service Tax @ 4.944%.
- Are we liabile for Central Excise Tax? or
- Do we have to pay Service @ 12.36% treating as Job Works Charges?
- Is our treatment (Treating as Works Contract) is correct?
Please suggest. Thanks in Advance.
CAclubindia
