13 July 2011
Our company "M/s. XYZ Pvt. Ltd. - Silvass" has manufacturing unit @ silvassa, we are POY manufacturers. We have started other unit in Gujarat "M/s. XYZ Pvt. Ltd. - Surat"from where our manufactured products are being sold. Now our company is considering to buy the raw materials(Poly chips) by unit in Gujarat and issue the same materials to our manufacturing unit ""M/s. XYZ Pvt. Ltd. - Silvass" for the manufacturing of POY. Is this considered as Job Work or not? If yes, what will be the Servce Tax Liability?
13 July 2011
Hi, I dont think procurement of any Raw Material may be considered as Job Work. In General terms Job work implies some goods have been given to Contractor for doing some work. If any Manufaturer are selling his own manufactured/jobworked material, it cannot be treated as Job Work in the Hands of purchaser. There is one more Blanket Concept that no one can sell to itself. Service of one Unit to another Unit of the same Company cannot be treated as Taxable Service.
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