Applicability of GST on manufacturing activity done by contractor
Query (Issue) Started By: – MohanLal tiwari Dated:- 19-12-2018 Last Reply Date:- 21-12-2018 Goods and Services Tax – GST
Got 8 Replies
GST
Dear Panelists,
We are manufacturer of castings / machinery parts (mainly for Railways) falling under 8607. In our factory premises, we are providing all required materials, machinery & equipment etc and getting in-process manufacturing activities done through contractors for various operation like molding / finishing / machining etc. During Excise & Service tax regime, such services were not attributable to service tax.
Now, most of contractors are GST compliance and issuing invoices charging GST @18% which is getting accum
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ay be.
Reply By KASTURI SETHI:
The Reply:
Supposing it is job work, even then it is taxable as under GST job work is taxable supply of service. In pre-GST era, Central Excise duty was leviable depending upon the nature of processes. GST cannot be avoided in any situation.
Reply By MohanLal tiwari:
The Reply:
Dear Sethi Sir,
Thanks for clarification.
Reply By DR.MARIAPPAN GOVINDARAJAN:
The Reply:
I endorse the views of Shri Sethi. Avoiding to charge the tax is not the objective of GST laws. You can plan according to the provisions of tax and not with intention to avoid tax.
Reply By MohanLal tiwari:
The Reply:
Govindrajan Sir,
Thanks. I appreciate your views.
Reply By KASTURI SETHI:
The Reply:
Tax avoidance is legal but tax ev
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