One of our clients get basic raw material from it's customers....they further process the material by galvanising it...hence they get covered under Business Auxillary service...
Now this client has come to know from his fellow job workers in the market that they are paying service tax of 12.36% only on 30% of the billed amount that is they are availing abatement of 70%...Please remember there is no seperate billing, there is only a single invoice raised showing how many pieces galvanised....Their contention is that since alimunium is used in galvanasing the service tax is not payable on such use of alimunium....
Hence i would like to know from you if there is such a provision in the act which can be availed....I am unable to find any such provision and believe that 12.36% is payable on the entire invoice raised.
CAclubindia
