Service tax on sub Job work

[Murari Agrawal]

Dear Experts,

We are receiving inputs for Job work under rule 4(5) (a). Some times due to capacity hindrance, we get the job done from a sub job worker.

we have been advised in this Forum that since there is nothing in the rules for such activity, we may carry on.

We shall be paying job charges to the sub job worker less than what we get from our principal.

Our query is  whether Service tax will be payable and if yes whether on full job charges received or after reducing job charges paid to the sub job worker.

AI Summary

Debate Over Service Tax on Job Work: Full Charges vs. Deductions for Sub-Job Workers Underlines Complexity of Dual Taxation A discussion on service tax applicability for job work involving sub-job workers highlights differing opinions. The main concern is whether service tax should be paid on the full job charges received or after deducting payments to sub-job workers. One expert suggests that sub-job work is exempt from service tax if the principal manufacturer pays the appropriate duty. Another expert argues that each service provider, including sub-job workers, is independently liable for service tax, referencing a legal precedent. The discussion underscores the complexity and potential for dual taxation in such arrangements, with no definitive consensus reached.