Applicable of Serviec tax on jobwork.

[Asked by Guest]

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 on jobwork painting hinges on whether the process amounts to manufacture; exemption may apply under job work rules.
Whether painting by a job worker is subject to service tax or treated as manufacture depends on whether the process alters the character or identity of partially processed plates; if it does not, the painting is a taxable service payable by the job worker and eligible for credit by the principal when duty is paid on the finished goods. Notification No. 25/2012-ST may exempt service tax where appropriate duty is payable by the principal manufacturer, so application of the notifications and factual assessment of the manufacturing process determines levy and liability.