Dear Expert,
Require your guidence in Service Tax Related,
one of my client is doing Electroplating business in Chennai. As per Service tax law and Tnvat law Electroplating Business comes under Work Contract service.My client is raising invoice as 50% Raw Material Cost and 50% Labour charges. They paying vat for 50% raw material cost only as per Tnvat Labour charges is fully exempted.
As per service tax Notification no 25/2012 https://www.cbec.gov.in/htdocs-servicetax/st-notifications/st-notifications-2012/st25-2012
. Carrying out an intermediate production process as job work in relation to -
d) processes of electroplating, zinc plating, anodizing, heat treatment, powder coating, painting including spray painting or auto black, during the course of manufacture of parts of cycles or sewing machines upto an aggregate value of taxable service of the specified processes of one hundred and fifty lakh rupees in a financial year subject to the condition that such aggregate value had not exceeded one hundred and fifty lakh rupees during the preceding financial year.
As per above para we are exempted from pay service tax provided if the principle employer is excise manufacturer.
My Query is
My Clients last year Gross turnover is 2 crores in that 50% Raw material Cost and 50% is Labour Charges.
As per the notification an aggregate value of taxable service of the specified processes of one hundred and fifty lakh rupees in a financial year subject to the condition that such aggregate value had not exceeded one hundred and fifty lakh rupees during the preceding financial year.
I want to know whether my client is Liable to pay service tax or not?
Whether i have to Consider only the labour part for paying service tax or whole contract value?
This Year they already crossed 1crores for 1st 3 quarters Expected turnover is 4 crores.
Still they didn't apply for Service Tax number.
Please guide me .
With Thanks & Regards,
C.A.Arun Kumar Abel
C A Final Student.
CAclubindia
