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,
\nWe 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.
\nNow, most of contractors are GST compliance and issuing invoices charging GST @18% which is getting accum<\/p>\n
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\nReply By KASTURI SETHI:
\nThe Reply:
\nSupposing 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.
\nReply By MohanLal tiwari:
\nThe Reply:
\nDear Sethi Sir,
\nThanks for clarification.
\nReply By DR.MARIAPPAN GOVINDARAJAN:
\nThe Reply:
\nI 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.
\nReply By MohanLal tiwari:
\nThe Reply:
\nGovindrajan Sir,
\nThanks. I appreciate your views.
\nReply By KASTURI SETHI:
\nThe Reply:
\nTax avoidance is legal but tax ev<\/p>\n
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