TaxTMI 
TaxTMI 
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
Eligibility and applicability of service tax and excise
18 Apr 2009 
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Service tax on job work applies unless the operation qualifies as manufacturing or the principal bears excise liability.
Whether laser cutting job work attracts service tax depends on two situations: if the principal manufacturer is liable to central excise duty, the job worker need not pay service tax under Business Auxiliary Services; and if the job worker's operations constitute a manufacturing activity, service tax likewise does not apply. Absent those conditions, the job worker's labour-only cutting service returning material and waste to the customer is taxable as a service once threshold rules apply. (AI Summary)
Whether laser cutting job work attracts service tax depends on two situations: if the principal manufacturer is liable to central excise duty, the job worker need not pay service tax under Business Auxiliary Services; and if the job worker's operations constitute a manufacturing activity, service tax likewise does not apply. Absent those conditions, the job worker's labour-only cutting service returning material and waste to the customer is taxable as a service once threshold rules apply. (AI Summary)