Service tax on job work
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
17 August 2012
Dear friends, I am working in pharmaceuticals manufacturing co. We also manufacturer medicines on loan licence basis to third party & raised job work bill for our service charges. In this procedure, third party provide us all the materials & each & everything, we only process the raw material to get the finished goods. My question is this whether service tax will be applicable in this case, because we are doing job work, but on loan licence basis, if yes then from when & which amount ? Waiting for your kind reply at the earliest.
17 August 2012
Taxability under ST laws is linked with manufacturing status vis-à-vis excisability of the product on which process is carried out .
In short, Job Worker is liable to pay ST only if he doesn’t carry out any mfg process U/s 2(f) or if he does carry out a mfg process U/s 2(f) the product he is making is a non-Excisable. However please note here that Excise includes the excise goods with NIL rate and exempted goods.
Therefore the Service tax would be levied on processes not amounting to manufacture or production of goods carried out by a person.
In your case it would amount to manufacture and hence no service tax would be leviable. However apart from the invoice that you raise for your job charge, you also have to provide seperate Excise invoice to your loan licensee so he gets credit of the Excise.
In short, Job Worker is liable to pay ST only if he doesn’t carry out any mfg process U/s 2(f) or if he does carry out a mfg process U/s 2(f) the product he is making is a non-Excisable. However please note here that Excise includes the excise goods with NIL rate and exempted goods.
Therefore the Service tax would be levied on processes not amounting to manufacture or production of goods carried out by a person.
In your case it would amount to manufacture and hence no service tax would be leviable. However apart from the invoice that you raise for your job charge, you also have to provide seperate Excise invoice to your loan licensee so he gets credit of the Excise.
17 August 2012
Under the new service tax negative list, it is clarified that the jobworker need not pay service tax if the process amounts to manufacture under Central Excise also under STATE excise.
So, I agree with expert.
So, I agree with expert.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- REGARDING GST ON COMMERICIAL PROPERTY
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- GST on export of services and Input Credit
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- TDS U/S. 194NF
- ITC temporary reversal and reclaim
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- Applicable TDS rate for sale of property in Nov 2024
- Donation Receipt u/s 80G
- MIS MATCH OF INVOICE NUMBER
- VERIFICATION OF REFUND RELATED
- GST Regis.
- ITC c/f from FY2022-23 to FY2023-24 entered the same in table 8C of GSTR9 of FY 2022-23, in FY23-24
- Late filling fees Demand by gst office
- IGST Credit-Show cause notice issued-confusion
- Short and Excess provision of expenses
- Issue of gst e invoice
- Interchangeable words in accounts
- Adjusted profit/Loss in the case of LLP and Pvt. Ltd.company
Trending Online Classes
CAclubindia
