Applicable of Serviec tax on jobwork.

[Swapneswar muduli]

Dear Sir,

We are a manufacturer and we send the partial processed inputs to our job worker under Cenvat credit Rule 4 (5)(a). the job worker has added some his won material like color for paint our material.

(In short we send the plastic plates and job worker paint this plastic article with different colors as per aou requirement ans return to us ) In this above case if the job worker had registered in Central Excise and service tax than which tax is applicable in this transaction. whether is attract for service tax or Excise Duty.

If service tax is applicable than under partial reverse charge mechanism we also liable to pay service tax as per reverse charge mechanism if the job worker is a proprietor firm ?

Regards

Swapneswar Muduli

AI Summary

Service Tax vs. Excise Duty: Determining Tax Applicability on Job Work for Painting Plastic Plates Based on Process Impact. A manufacturer inquires about the applicability of service tax or excise duty on job work involving painting plastic plates. The discussion reveals that if the job work does not alter the fundamental use or character of the product, it is considered a service and subject to service tax, payable by the job worker. However, if the process is essential to the manufacturing and differentiates the product, it may be considered manufacturing, exempt from service tax. Various participants cite notifications and rules, emphasizing the exemption under specific circumstances, leaving the manufacturer to decide based on the complete manufacturing process.