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Applicability of service tax

Vijay Sawant (Accountants) (32 Points)

26 June 2012

Pls Help me on the following issue..

We do Computerized Embroidery job work on the Fabric (principal Raw material) which has been provided by the Exporter,(The Yarn (input) which is required for the embroidery work is purchase by us) as soon as the embroidery work is done then the same is return back to the Exporter which is finally sold by the exporter. Here we are not charging any Excise duty or service tax on invoice amount nor we are taking any input credit on the same.

As per the latest Amendment/Notification in Service tax Law(Negative List of Services) m i cover under the definition of service provider and i suppose to pay service tax or not..???

Pls reply on the same.
asap.

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4 Replies

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 03 July 2012

It is important for you to note that for a job worker whenever there is an activity on which no excise duty is payable then service will be attracted on the same. Hence if your taxable turnover is more than Rs 10 lac you need to deposit service tax on the said amount of job work.

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mike (MTO) (43 Points)
Replied 14 July 2012

Originally posted by : Ajit kumar Dubey
	It is important for you to note that for a job worker whenever there is an activity on which no excise duty is payable then service will be attracted on the same. Hence if your taxable turnover is more than Rs 10 lac you need to deposit service tax on the said amount of job work.	I

Thanks for sharing useful piece of information. i agree this.

CA Unnikrishnan Nair N (Chartered Accountant) (2083 Points)
Replied 14 July 2012

As per clause 27 to Mega Exemption noti. no.25/2012 , intermediate production process as job work in relation to textile processing is exempt from service tax. Pl. check whether your work can fit in to this category.