Liability of service tax on which entity ?

This query is : Resolved

rohit mishra (Querist)
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17 February 2016 IF A LTD MANUFACTURING COMPANY ( REGD. WITH SERVICE TAX) SENT GOODS FOR JOB WORK TO XYZ CO.A PROPRIETERSHIP FIRM AND XYZ FURTHER SENT SUCH GOODS TO X ENTERPRISES ANOTHER PROP.FIRM.
NOW WHO IS LIABLE FOR SERVICE TAX ?

S SRINIVASAN

S SRINIVASAN (Expert)
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18 February 2016 If the Process amounts to manufacture, then the principal manufacture who sends the goods to Job Worker can pay the duty and relieve the job worker from any duty liability. For this purpose procedure mentioned in circular 214/86 needs to be followed.

If the process do not amount to manufacturer it will be business auxillary service or works contract.

If it is BAS, the service tax needs to be paid by each sub contractor and the every one in the supply chain can claim cenvat on duty paid on input services.

If it is Works Contract, RCM based ST will be applicable for A Ltd. 50% of the Duty to be paid by service provider