aditi (ca) (28 Points)
15 May 2010We are a manufacturing unit and we also do job work . I want to know wether I'm liable to charge service tax in my job work invoice if we do job work for the party which further uses the material (on which we have done some job work) for further manufacturing.
Please answer my query.
0
Pavan Jain S
(Chartered Accountant)
(1575 Points)
Replied 15 May 2010
If the goods on which job work is done is used in manufacture of excisable goods, then you are not liable to service tax
Jeevesh Mehta
(Advocate- Corporate Commercial & Indirect Tax Advisory)
(861 Points)
Replied 15 May 2010
Dear Aditi,
The job work activity is covered under Business Auxiliary Services head. A unit is said to be a job worker only if the process done by him does not amount to manufacture, that is to say that the goods processed by a job worker should not be final a should be subject to further manufacturing processes at the end of pricipal manufacturer.
Therefore you are liable to pay and charge service tax as you are just a job worker and your product is not a final product in it self.
Regards
9811617186
Pavan Jain S
(Chartered Accountant)
(1575 Points)
Replied 15 May 2010
Kindly refer to the notification No 8/2005 ST dated 1/3/2005. Activity of a Job worker may or may not amount to maunfacture. It is not proper to say that if a activity is a manufacure then the person carrying on such activity is not a job worker. If the job worker manufactures excisable goods and the same are used as input by his client, then the job worker has two options. Either he can pay excise duty and enable the client to claim credit of the same or the job worker can claim the benefit of CE notification 214/86 - CE.
Therefore, if the job worker has performed any activity on the goods supplied by the client and the same goods are used by the client for manufacture of excisable goods, ST is not applicable.
Bhavik Davda
(Proprietor)
(238 Points)
Replied 16 May 2010
Jeevesh Mehta
(Advocate- Corporate Commercial & Indirect Tax Advisory)
(861 Points)
Replied 17 May 2010
HI Bhavik,
Well what you are saying is purely a export transaction. Any thing you manufacture in India and export it to US would be Export. As we no Exoprt of goods and services are exempt from Duty/Tax.
For more details you may contact us at 09811617186
regards
periasamy
(DGM Finance)
(91 Points)
Replied 23 August 2011
Sir,
We are an engineering doing job work of end products for boilers for which the goods are moved from our factory by paying excise duty by ourself or by our client for whom we are doing job work. For this conversion bills, we are not paying any service tax, since the end products are covered under excise duty. My query is, on such job works, we are giving sub contract to some auxillary works. Kindly inform whether such sub contractor is exempted from service tax, since the final end products are excisable.
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