Dear Experts,
I need clarification on one issue. X company is doing job work for Y company, where Y company is paying excise duty on the total material value. Where as X company is not paying any service tax on the job work done. Since Y company is paying excise duty on the total value of the material, is it essential to pay service tax by X company?
Kindly clarify
Srinivas
Does X Company Owe Service Tax or Excise Duty for Job Work? Insights and Notifications Explained A discussion on a forum involves a query about whether X company needs to pay service tax when performing job work for Y company, which pays excise duty on the material value. Experts provided insights: one expert stated no service tax is needed as excise duty is paid. Another explained that if X's activity is manufacturing, excise duty applies; otherwise, service tax is applicable. If the process counts as manufacturing, X pays excise duty, which Y can credit. If not, X pays service tax, which Y can credit. Notification No. 214/86 and No. 25/2012-ST were referenced for procedural guidance. (AI Summary)
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