We are the manufactures and registered under central excise & service tax. We are also doing jobwork to outsiders, for that the Principal Mfr (Non Assessee) gives the material, we are only doing the jobwork. For that we are charging labour charges. This process does not amount to Manufacturers (Because the same tariff heading is applicable for the material before jobwork and after jobwork).
Please advise whether for the labour charges service tax applicable / not?
If the material is recd from Assessee, what is the impact?
22 September 2014
No service tax is payable on ‘any process amounting to manufacture or production of goods’ by job-worker, as that activity falls under the negative list under Section 66D (f) of the Finance Act, 1994. Also, S. No. 30 (c) of notification no. 25/2012-ST dated June 20, 2012 exempts ‘carrying out any intermediate production process as job-work in relation to any goods on which appropriate duty is payable by the principal manufacturer’. S. No. 30 also covers certain other activities of job-work. If your principal is manufacturer and your process is intermediate production process you will not be covered under service tax for this work provided appropriate duty is payable by the principal manufacturer. If your principal is not paying you have to pay service tax.
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