Excise duty and Service tax liability

[sandeep sain]

Dear Sir,

We are doing Job work for various customer as i know about the tax structure for making job work invoices we have to charge on sales tax on the 30% value of the total job work service.

Can you please let us we are liable to pay excise duty or service tax on the job work invoices for Excise/Service Tax registered or non registered customer.

Please note we are not a maker of final product.

Regards

Sandeep

[Ganeshan Kalyani]

Job work service is a taxable service and service tax is payable unless the process amounts to manufacture.

[sandeep sain]

Dear Sir,

I had read about it if we are not a maker of final product then there will be not liability for us both Excise/ Service Tax.

Regards

Sandeep

[Radha Arun]

"Manufacture" is not only making the final product. If you carry out some process by which item "a" becomes item "b", which is recognisably and commercially different, this is called manufacture in central excise.

If the process carried out amounts to 'manufacture' in this sense, no service tax is applicable. However excise duty may be applicable, depending on your turnover. There are exemptions for job work. More facts about your case need to be known to advise on the exemption.

If the process carried out does not amount to manufacture, service tax is applicable.

[Ganeshan Kalyani]

Yes if the process amounts to manufacture then excise duty is leviable if turnover crosses the limit. If the process does not amounts to manufacture then service tax levied.

[KASTURI SETHI]

Rightly explained by Sh.Ganeshan Kalyani, Sir. In other words, you are either to pay Central Excise duty or Service Tax as explained by Sh.Ganeshan Kalyani, Sir. Both, simultaneously, cannot be charged.

[Ganeshan Kalyani]

Thank you Kasturi sir for liking my reply. In fact I learn a lot from your reply and views which is supported by section/rules etc. Thanks.

AI Summary

Manufacture vs service tax: job work treated as manufacture triggers excise duty; otherwise service tax applies.
Job work is ordinarily a taxable service and attracts service tax unless the processes performed amount to manufacture. If the activity effects a recognisably different product, central excise duty may instead be leviable, subject to turnover thresholds and job-work exemptions. Determination requires factual analysis of the processes.