Service Tax on the job of ginning and pressing of cotton under business auxiliary service-reg - Service Tax - F.No. 137/151/2006-CX.4

F.No. 137/151/2006-CX.4 Government of India Ministry of Finance Department of Revenue Central Board of Excise Customs New Delhi, the 13 th December, 2006 Subject: Service Tax on the job of ginning and pressing of cotton under business auxiliary service-reg Please refer to your letter C.No. I (22)15/O M/STF/06 dt. 27.09.2006, on the above subject. The process of ginning and pressing of cotton does not amount to manufacture. Therefore, if these processes are undertaken 'for or on behalf of the principal/client', the same would fall within the purview of "business auxiliary service". However, notification No.14/2004-ST, dated 10.09.2004, exempts, interalia, production or processing of goods for or on behalf of the client if it is provided in relation to textile processing. Since, cotton fibre is a textile material, and ginning/processing are types of processing thereof, the said processes are covered within the ambit of exemption. Therefore, cotton ginning/pressing is presently exempted from service tax. (Gautam Bhattachrya) Commissioner (ST)