Testing of Injection Moulds - Service Tax liability?
IN a recent RAC meeting of Hyderabad Central Excise Zone, a Member asked the following question:
We are manufacturers of Injection Moulded Plastic Articles; we are loading the customers' moulds on our injection moulding machine to test the functioning of new moulds & its products for 8-12 hrs and we charge to the customers for the machine hours used for that purpose.
In this connection the following queries are raised:
i. For this mould trials on our machine, is service tax attracted?
ii. If so,under which service it can be classified?
iii. If we are liable to pay service tax, whether we can avail SSI exemption?
iv. Prior to mould trials, whether we/our customers have to file any intimation/declaration to Central Excise department regarding mould trials?
The Department replied:
Till 30.06.2012, there were more than 115 service categories which were liable to service tax. Any taxpayer to know whether his services were taxable had to refer to the definition of various services and decide whether tax is payable or not. However, w.e.f. 1st July 2012 the same has been done away with, as there are no specific taxable services there is a negative list of services on which no tax is applicable. Also there is a mega notification which provides a list of services which are specifically exempted from tax. In the present case, the services rendered are taxable. (before or after 1.7.2012 or both?)
Taxable service of aggregate value not exceeding ten lakh rupees in any financial year is exempt from the whole of the service tax liable thereon under section 66B of the said Financial Act as per Notification No.33/2012-Service Tax dated 20.06.2012.
If the customer is a manufacturer of moulds and sending the moulds without payment of duty for testing purpose, he has to intimate the jurisdictional Central Excise Officer under Rule 16C of Central Excise Rules, 2002. If the customer has purchased moulds from open market he need not file any intimation to the Central Excise Department.