vat applicable to heat treatment or not ?

Dear Sir,

We are doing Heat Treatment Jobwork . In the process we use Ammonia & Steam for Gas Nitriding & Oxidising. Jobs are heated in closed chamber(Furnace) at 570 deg.temp.with Ammonia, Nitrogen & steam for 4-5 hrs.Main purpose is to increase surface hardness & corrosion resistance. After this process metallurgical changes take place & Ferrous Nitrides & Ferrous Oxides are formed on surface. Nitride layer is diffusion ( Goes Inside the surface) -20 micron& oxide layer is on top 2 micron . These are not visible , we have to find out by destructive testing & microscope.

Our material Ammonia or Steam is not going along with material directly, it is consumable for us required in small qty. Basic raw material plates are send by customer to us. As this unit is EOU, now Sale Tax Dept.is not giving them refund & asked for VAT on Jobwork.

As we are not selling or transfering any our material to them, we are not liable for VAT.Please gives us your comments.

D K Salunkhe 

 

Replies (1)

1. As there is no transfer of property even in consumables in the case of heaat treatment, wct under vat act dont apply at all.

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