Difference between job work and works contract

Darshan Dodiya (Student CA Final ) (392 Points)

13 January 2013  

Hello sir...

What is the line of difference between Job  Work and Works Contract ? For example if X ltd. - A Hotelier gives an order to Y Ltd.  - A  manufacturer of branded clothes to make T-Shirts for its employees having logo of company i.e. X Ltd. this would amount to Works contract and excise will not be charged. But if for example Z ltd.  -  a textile manufacturer gives an order to Y ltd. to make some printing works on the clothes manufactured by Z Ltd , this would amount to Job Work and exise will be applicable to subject to conditions of Valuation Rules. So i want to know how to determine whether a particular case will fall under works contract or job work..??

Please reply....