04 June 2008
Parent Company issuing rawmaterials, stores and incure other expenses for manufacturing final product by its subsidiary, and the final product is not excisable, final product come back to parent company and parent company paying processing charges to subsidiary, my question is whether its a business auxiliary service and whether service tax is applicable..... expecting reply soon....... thank u.
I think you are correct. Since jobworks not covered by Excise are normally covered BAS (service Tax). BAS is defined to include any production or processing of goods for and on behalf of the client which is not covered by sec 2F of Central Excise. For detailed clarification pl refer Para 19.1 Service Tax (Taxmann) SS Gupta. Best recommended book.
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