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MESSAGE BOARD

   

Budget Suggestion


Anamoly in the definition of "Exempted Service"

Section 66D of the Finance Act (Negative list of services) excludes “any process amounting to manufacture or production of goods”. The “exempted service” defined under rule (e) of CCR, 2004 includes the services mentioned in the “Negative list of services”. Rule 6(1) of CCR, 2004 does not allow input services used for the provision of exempted Services.

The above provision and rules implies that if the activity carried out by job workers amounts to "manufacture", the job workers need to reverse / pay the common input service tax credits, proportionate to the exempted turnover (i.e., labour charges received from the principal) or pay up 7% of the above credits on the value of labour charges. Therefore, this anomaly created in the law needs immediate fix up in the ensuing budget.

Warm Regards

Yogish Rudra.M

U K GODBOLE GODBOLE 01/02/2016

 

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