Job work and molding charges and reakted tax issues

[Suvarna Kumar]

We are 100 percent EOU and if  we sent PP mats  to Job work for rubber packing . In this case Job worker using their own backing compund .The backing compund materilas is not an duty releated materials and they billing us molding charges PP mats . In this case central excise have any objection ?

PP mats is 100 percent EOu products and Job worker make this as rubber molded PP mats .

Job worker need to pay service tax or any other charges for this work.

Please clarify

 

AI Summary

Works contract service may attract service tax when a job worker uses its own materials; sale-plus-jobwork may enable exemption.
When a 100% EOU sends semi finished polypropylene mats to a job worker who uses the job worker's own rubber compound, the processing falls within Works Contract Service and service tax is likely leviable. Alternatively, if the job worker first sells the rubber compound to the EOU and then performs the backing as job work, the job worker's job work charges may qualify for exemption under the mega exemption notification, subject to its conditions.