Repacking and relabelling of Bought out items alongwith final product

[Asked by Guest]

Dear Sir,

Can our Processor(i.e Job worker) carry out repacking and relabelling of Products. Such products are not MRP based products and as per that product chapter heading repacking and relabelling does not amts to manufacture.So please explain us how he can carry out such activity whether on payment of duty or whether without payment of excise duty, Please explain the procedure,Please give us any reference regarding this.Thanksand regards.

[YAGAY and SUN]

Dear Sandehs,

Service tax would be applicable on this transaction. Goods can be sent on an challan under CENVAT credit Rules 4 (5) (a).

Regards

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

AI Summary

Service tax applies to repacking and relabelling; goods may be moved under CENVAT challan preserving input credit.
Repacking and relabelling by a job worker does not attract excise as manufacture in this advisory; instead, service tax applies. Goods can be sent to the processor on a challan under the CENVAT credit Rules, allowing continuity of input credit while the repacking and relabelling service is performed.