CST on Job work

[Pradeep Jain]

Sir,

Our unit is situated at West Bengal. We have issue a Purchase Order for Job-work. The material wa supplied by us to Vendor on Free of Cost Basis. Now invoice raised by the vendor on total value.

Cost of FOC Goods and Job worker charges. Value of FOC goods is adjusted.  As no C- Form can be issue for Job work.  Hence Vendor is asking  CST at the rate of 2 percent   on total value of goods ?

Kindly give your opinion that  is CST is payable on total invoice value or on Labour charges  OR no amount of CST is payable.

Regards

Pradeep

[YAGAY andSUN]

Dear Pradeep,

If it pure job-work, then, no CST would be charged.  There is no provision to charge in CST Act read with Rules made there under on the Jobwork charges.

Regards,

TeamYAGAY & SUN

(Management & Indirect Tax Consultants)

AI Summary

CST on job-work not leviable where goods are supplied free and only job-worker service charges are invoiced. Where goods are supplied free of cost to a vendor for processing and the vendor invoices aggregate value including cost of goods and job worker charges, if the transaction is a pure job work then no CST is chargeable under the CST Act and Rules on the job work charges.