service tax applicable or not

[Ramakrishnan Seshadri]

Dear Sir,

We are the manufacturers of automobile parts. We want to send to our job worker some fabrics for stiching purpose.

His job is only to stich the fabric and return to us.

Our question is whether any any service tax has to be charged in his invoice or not.

Kindly experts clarify our doubt.

Thanks & Regards,

S.Ramakrishnan

[KASTURI SETHI]

Sh.Ramakrishnan Seshadri Ji,

First of all you should go through all the replies to Issue ID. No. 110641 dated 16.7.2016. Thereafter, you should peruse notification no.8/2005-ST dated 1.3.2005 as amended vide Notification No.19/2005-ST dated 7.6.2005(rescinded) and also read serial no.30 of notification no.25/12-ST dated 20.6.12 as amended and Board's circular mentioned in my reply to the Issue ID no.110641 dated 16.7.2016.

The essence of above all is that either CE duty is required to be paid or ST is to be paid. In case CE duty is not payable by virtue of any exemption notification or Board's circular, ST has to be paid and this activity is covered under the category of, "Other Than Negative List". Prior to 1.7.12, this activity was classified under the category of BAS.

[Ganeshan Kalyani]

Sir, I agree with Sri Kasturi Sir, the same query was discussed in below issue id.

#1Issue Id: - 110641 Dated: 15-7-2016

Thanks

AI Summary

Service tax applicability for job-work stitching: where excise is exempt, service tax applies under other than negative list. Whether service tax is chargeable on a manufacturer's fabric sent to a job worker for stitching depends on whether central excise duty applies; if excise is exempt, the stitching falls within service tax coverage under the other than negative list classification, previously treated as business auxiliary services.