Servie Tax on Job work Processing

[Abdul Razack Basha]

Dear Sir,

We are doing job work for processing of Electronic Components for EOU unit, EOU unit sending 100 percent raw materials and also capital goods to us and we do some process and send back to  EOU along with wastage and balance materials after processing.  We are raising Labour Invoice in favour EOU unit. Please clarify Service Tax applicable for this Job work (Excisable Commodities) Invoice. (Value will be more than Rs.10.00 lakhs perannum)

Also we let-out our property and charging Service tax due to annual rental value will be more than Rs.10.00 lakhs.

As per my knowledge job work for excisable commodity will not attract any service tax/ED.

So please clarify the link between these two income Rental Income (Service Tax Applicable) and Job work Income (Service Tax not applicable) in service tax point of view.

Regards

Abdul Razack

[Arup Das]

if  the process / work to be carried out by you is an intermediate production process in manufacture of excisable goods by the EOU Unit as a principal manufacturer, then,  exemption from payment of Service Tax can be claimed as per Sr. No. 30(c) of Notification No. 25/2012-ST dated 20 June 2012.

Regards

Arupp Das

[Madhukar N Hiregange]

The EOU must have sent the RM under a permission and if the process amounts to manufacture as it appears to be- A is converted to B then there is no ST on the same as under the Negaitve list activities of manufacture are excluded.

JOb work resulting in a new commodity is not liable for ST.

[Abdul Razack Basha]

Thank you

AI Summary

Service tax exemption for job work: processing that amounts to manufacture for an EOU is not taxable. Job work processing of electronic components sent by an EOU is not subject to service tax where the processing amounts to manufacture of excisable goods by the EOU as principal manufacturer, provided raw materials and capital goods are sent under permission and the process results in conversion; such job work falls within the statutory exclusion for manufacturing. Rental income from letting property is separately taxable if it exceeds the threshold and does not affect the job work exemption.