Service Tax liability on job work

[Ramesh Agarwal]

a RMC (Ready Mix Concrete) plant is doing job work of another private limited company. All the raw materials required i.e. Cement, Sand, Stone Chips and Ad mixture are supplied by the principal company and paying job work charges for supplying ready mix concrete with out charging any excise duty. My question is that whether there is any Service Tax liability on the job work charges received from the principal supplier?

[Radha Arun]

Why isn't excise duty being paid on the RMC?

[Mahir S]

If central excise duty is paid by the Principal company at the time of clearance of the finished goods after receipt from the job worker, then there is no service tax liability for such job charges.

AI Summary

Service tax on job work: no levy where principal pays excise duty on clearance after receipt from job worker. The operative position is that no service tax liability arises on job work charges where central excise duty is paid by the principal at the time of clearance after receipt from the job worker; absence of excise payment prompts inquiry into whether excise should be applied to the ready mix concrete.