Serviec tax on jobwork

[Asked by Guest]

Dear Sir,

We are a job worker and we are not registered under central excise we received material from Excisable unit we doing only job work and further we send these material to another job worker for any other process. and after receiving these material we send back to principal manufacturer and the principal manufacturer clearance the material with payment of appropriate duty.

My query is the third party job worker billed us and he charge the vat as well as service tax both in his bill.

Is this charged in the invoice both service tax and vat is correct or not ?

Regards

Swapneswar

AI Summary

Service tax exemption on jobwork inputs may apply where principal manufacturer pays duty; VAT depends on sale characterization.
Partially processed inputs moved between a principal manufacturer and job workers are not treated as sale and generally do not attract VAT, though consumables or replaced parts may be deemed sold and taxed. If the principal manufacturer pays duty on the final goods, jobwork services relating to those goods can be exempt under Notification No. 25/2012 ST; adding material or value by a downstream job worker may recharacterise the transaction as a taxable work contract or sale and affect whether VAT and service tax are properly charged.