Job work and service tax

[RAJESH IYER]

Notification No. 25/2012-ST wide Entry no.30 (c). exempts Carrying out an intermediate production process as job work in relation to

any goods on which appropriate duty is payable by the principal manufacturer;

from payment of Service Tax.

My Question is if a job worker is carrying on process which is not amounting to manufacture  and   processed goods are returned back to the factory and further manucturing process is carried on in the factory and after further manucaturing process the goods are cleared on payment of duty.

In such cases whether job worker is liabile to pay service tax.

Thanks and regards

[Brijesh Verma]

Your query is identical to what is mentioned in 30(c) of NN 25/12. Exemption shall certainly be available. 

[S G]

Entry No. 30 (c) of Mega Exemption Notification No. 25/2012  specifically exempts the service of carrying out an intermediate production process as job work in relation to any goods on which appropriate duty is payable by the principal manufacturer. 

Hence, it is immaterial whether intermediate process amounts to manufacture or not; if any process is carried out by a job worker in relation to final goods on which excise duty is payable then service provided by job worker shall be exempt and fall under Entry No. 30 (c) of said Notification.

AI Summary

Job work exemption: services by job workers are exempt where principal goods are subject to excise duty, irrespective of manufacture. The exemption in Entry No. 30(c) of Notification No. 25/2012 covers job-work services that constitute an intermediate production process in relation to goods on which the principal manufacturer pays appropriate duty; whether the process amounts to manufacture is immaterial, and such job-worker services are therefore exempt from service tax when linked to goods subject to excise duty by the principal manufacturer.