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Works contract in regards to printing bills

Rahul Agrawal (Article Assiatant) (48 Points)

31 March 2014

Do the bills of printing fall under works contract? Service provider has charged VAT on the bills. Material is also provided by the service provider and bills are being sent with descripttion as " Printing Charges". Is reverse charge and works contract tax applicable on such type of bills?

Please advice me in this matter and if you have any case law in this subject please give me the reference.

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8 Replies

CA Saroj Kumar (Keen to learn something new every moments) (2588 Points)
Replied 31 March 2014

no ot is not work contract...

Sumit Grover (Chartered Accountant ) (3652 Points)
Replied 31 March 2014

Printing (both on textile and paper) has been held as ‘works contract’ for the purpose of sales tax. However, it should fall outside the ambit of service tax. Since, teh same is exmpte vide entry no. 30(a) of N/N 25/2012-ST, which reads out as folows:

Carrying out an intermediate production process as job work in relation to agriculture, printing or textile processing

Thus, if printing is done on job work basis, it is out of purview of service tax.

At the same time, If entire printing work is done with material (e.g. letterheads, Invoice books, balance sheet etc.), the activity is ‘manufacture’. Any process amounting to manufacture or production of goods is not taxable service – Clause (f) of Negative List of services as per section 66D of Finance Act, 1994 introduced w.e.f. 1-7-2012.

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CA SUNNY GUPTA (Chartered Accountant) (36 Points)
Replied 01 April 2014

Very well explained Sumit Grover Thanks a lot

Rahul Agrawal (Article Assiatant) (48 Points)
Replied 01 April 2014

Thank you Mr. Sumit for your valuable reply

sudarshan (CA) (745 Points)
Replied 01 April 2014

printing of books may be production . But printing of letter heads, vouchers are not , they dont also fit into job work eligible for exemption. it is definitely works contract . Printing of Letter head cannot be a production activity.

Rahul Agrawal (Article Assiatant) (48 Points)
Replied 01 April 2014

So sir it means that if bills are raised for printing of vouchers and bill books, then in this case it is a works contract and hence work contract tax and service tax under joint charge will get applicable. Sir could you please help me with some notifications or case laws as well if possible.