We are a manufacturing company and off loading some of the jobs like gear cutting , turning, grinding etc.
Is Service tax payable on Job works/ Labour charges.
Please reply.
Thanks.
Ram Avtar Singh
(Nagari Sultanpur U.P.Delhi)
(14487 Points)
Replied 16 June 2009
Your product attract Excise therefore no service tax on jobwork
Madhukar N Hiregange
(Chartered Accountant)
(39034 Points)
Replied 17 June 2009
| Originally posted by :N V SIMHA | ||
| " |
We are a manufacturing company and off loading some of the jobs like gear cutting , turning, grinding etc. If you are manufacturing excisable goods and paying the excise duty then all processes done by the job worker are exempt under Not 8/2005. In these cases it maybe preferable that you issue invoice under Rule 4 (5) (a) If you are not excisable then the processes which amount to manufacture at the job workers end wouldbe excluded from the coverage under BAS clause - production or processing of goods for or on behfl of another. |
" |
Madhukar N Hiregange
(Chartered Accountant)
(39034 Points)
Replied 17 June 2009
Sorry it is not invoice but delivery challans.
ADITYA
(Manager Finance)
(742 Points)
Replied 20 June 2009
"If you are manufacturing excisable goods and paying the excise duty then all processes done by the job worker are exempt under Not 8/2005. In these cases it maybe preferable that you issue invoice under Rule 4 (5) (a)
If you are not excisable then the processes which amount to manufacture at the job workers end wouldbe excluded from the coverage under BAS clause - production or processing of goods for or on behfl of another."
I agree with Mr Madhukar and want to add that even if your Product is excisable goods and you are paying Excise Duty on the same, however the place where Job Work is done is important . If Job work is done within your Excise Registered Premises using your Machinery & infrastructure, the said activity will be treated under Manpower Supply which will attreact Service Tax . The said Service Tax paid to contractor can be taken back as Cenvat Credit.
The Job Work Charges paid for the Material sent out of the factory under Challan 4 (5) (a) will not attreact Service Tax as explained above.
Vikrant Agarwal
(accounts manager)
(37 Points)
Replied 06 April 2010
I Want to Know what will be tax implication on that labour,that is whether he/she has to pay service tax or excise duty Eg: Principal is providing raw material to job worker,and after the process done by that job worker whice amounts to manufactuer.
after the such process job worker returns that finished goods to principal and recive payament as labour charges.
my question is what will be tax implication on that job worker.
Amol
(Accounts)
(21 Points)
Replied 27 September 2010
We are excisable manufacturing unit, we outsource some of our work on labour to a company that does labour job for only our company. if the labour job company further gives our job for further processing like powdercoating / plating on labour to some other company, what willbe the tax implication for the labour job company & how they should send the material (on which challan) / will service tax be applicable. pl clarify..
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