CENVAT CREDIT / TAX LIABILITY

[puneet virmani]

INDIAN COMPANY SUBSIDIARY OF INTERNATIONAL COMPANY, IMPORTS CERTAIN GOODS FROM PARENT COMPANY FOR JOBBING PURPOSES, DO THE JOB MACHINERY WORK HERE IN INDIA AND RESEND THE GOODS TO INDONESIA FOR SALE THERE. NO IMPORT DUTY IS BEING PAYABLE AS FOR JOBBING IMPORT AND THEN EXPORT AFTER JOB WORK, TAKEN LICENSE FROM CUSTOMS FOR CONCESSIONAL RATE OF DUTY FOR THE SAME. WHETHER ANY EXCISE OR SERVICE TAX LIABILITY ARISES ON CHARGES TAKEN FROM THE PARENT COMPANY AS LABOUR SERVICE CHARGES. WHETHER CENVAT AVAILABLE OF THE INPUT SERVICES USED IN SAID JOB WORK.

AI Summary

Indian subsidiary seeks tax clarification on job work exports; no excise due, service tax exempt, CENVAT credit available. An Indian subsidiary of an international company imports goods from its parent company for job work in India and then exports them to Indonesia. The company seeks clarification on excise or service tax liabilities for labor charges and the availability of CENVAT credit on input services. The response clarifies that no excise duty is payable due to exportation, and service tax is exempt if the job work does not constitute manufacturing. CENVAT credit is available if the job work qualifies as manufacturing; otherwise, a refund can be claimed under Rule 5 of the CENVAT Credit Rules, 2004.