Chargability of service tax on jobwork by jobworker

[nagarjuna reddy]

Sir,

one of our client is doing job work on parts sent by other companies,activity is resharpening to parts

​whether he is to charge service tax on job work provided ?

[MUKUND THAKKAR]

No service tax is not applicable, if final products are cleared with the payments of excise duty.

[Mahir S]

It is immaterial as to whether the same goods are job worked again by another job worker. What is important is changeability of duty on finished goods, else payment of service tax thereon.

Specific exemptions for job under few categories/processes also provided in the notification.

[YAGAY andSUN]

Dear Nagarjuna,

According to the point no. 30 of the Notification No. 12/2012-ST, dtd 20-06-2012, w.e.f. 01-07-2012

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;
4. ....................................................;

then, no service tax would be applicable.

Regards

YAGAY and SUN

(Management and Indirect Tax Consultants)

AI Summary

Service tax on jobwork is not leviable where finished goods attract excise duty and are cleared by the principal. If processed goods are cleared as finished products with payment of excise duty by the principal manufacturer, service tax on the job work is not leviable. The operative test is whether the finished goods attract excise duty; intermediate production processes performed as job work in relation to goods on which appropriate duty is payable by the principal are excluded from service tax under the notification.