Process amounting to manufacture

Anand Jha (Querist) 06 September 2016 This query is : Resolved
We are manufacturing edible oil, Filling and packing of edible oil is part of our manufacturing process. Filling and packing work given to contractor on piece rate basis...
Is the packing service provided by contractor liable to service tax?

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Ms.Usha Kapoor (Expert) 07 September 2016
Dear Client,

No! packing service provided by Contractor through his labourers is in the negative list and hence exempt from service tax. You wouldn't be liable to pay any service tax to contractor on account of his filling and packing services through his workers.

Anand Jha (Querist) 07 September 2016
I agree with your opinion but our company consultant's logic is "Contractor is not manufacturing oil, only packing hence process is not manufacturing". Can you give me any reference of case law, circulars etc...?

Ms.Usha Kapoor (Expert) 11 September 2016
Filling and Packing in the negative list means a blanket exemption is given to all those services found in negative list. NO separate case law is required.

Rajendra K Goyal (Expert) 21 September 2016
Commercial query. Discuss with tax consultant.

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