service tax to be charged on job work

[Ramakrishnan Seshadri]

Dear Sir,

We are manufacturer of automobile parts.

One of our supplier has sent pipes to us for job work under delivery challan.

The nature of work we are doing at our factory is only bending the pipe.For this bending they have issued a PO to us for that job work.

After bending we will be sending them to our supplier in turn they will use it in this final products and pay excise duty.

Now my question is how to raise invoice to them.

Whether we have to charge service tax or excise duty on such material.

Kindly clarify.

Thanks and Regards,

S.Ramakrishan.

[YAGAY andSUN]

Dear S. Ramakrishan,

In our opinion such services are exempted from levy/payment of service tax as the job-worked goods would be used in the manufacturing of finished goods on which duty would be payable/paid by the Principal Manufacturer.

Please refer point no. 30 (c) of the Notification No. 12/2012-ST/17^th March 2012.

30. Carrying out an intermediate production process as job work in relation to -

1. ..........................................
2. ..........................................
3. any goods on which appropriate duty is payable by the principal manufacturer; or
4. .............................................

This is for your kind information.

Regards

YAGAY and SUN

(Management and Indirect Tax Consultants)

[Mahir S]

You have to raise invoice only for Labour Charges. No Service tax or Excise duty is required to be charged, as rightly explained above. But do follow the job work procedure under noti. no. 214/86. C.E.

AI Summary

Job-work exemption: labour-only invoices for bending of supplied parts; no service tax or excise charged, follow job-work procedure. Job-work services consisting solely of bending pipes supplied by a principal manufacturer are not subject to service tax where the job-worked goods will be used in manufacturing finished products on which duty is payable by the principal manufacturer. The contractor should invoice only for labour charges and must follow the prescribed job-work procedures under the excise job-work notification.