Eligibility and applicability of service tax and excise

[Kumar Swam]

This is regarding Business Auxiliary Service - Job work - Labour charges - is it eligible for manufacturer under excise or service tax liability. One person doing job work to his manufacturing client - by doing laser cutting (various desings) of metal sheet supplied by the manufacturer and sending back the material and waste to the respective customer. He is charge only labour charges for cutting of metal sheet. Please clarrify this activity (cutting of metal sheet according to customer design) belongs to manufacture or service tax will apply on this activity after crossing 10 lakhs

AI Summary

Labor Charges for Laser Cutting: Excise Duty Exemption or Service Tax Liability? Clarification on Tax Obligations Provided. A query was raised regarding whether labor charges for job work, specifically laser cutting of metal sheets, fall under excise or service tax liability. The person performing the job work only charges for labor. The response clarified that if the principal manufacturer pays excise duty, or if the job work qualifies as a manufacturing activity, the job worker is exempt from paying service tax. However, if neither condition is met, the job worker must pay service tax on the labor charges once the threshold of 10 lakhs is exceeded.