levy of stax

[varun grover]

sir one of my client is doing job work for other manufactures in uttranchal which is covered under 2f (ii) defination of manufacturing under excise act, however the same has been exempted due to special tax exemption given to state of uttanchal.

my question is whether service tax would be attracted in above scenario.if company ia doing job work by providing service by labour and their machinery..there plea is tha due to specified point given in mega exemption 25/2012..stax would not be attracted where is excise ia levied..bt however they are enjoying exemption on such excise.pls refer me any related case law if any

[KASTURI SETHI]

Exemption from ST on job-work is available if CE duty on final product is paid. It is conditional exemption. In the example cited by you ST is payable. Prior to 1.7.12, this condition was in force vide Notification No.8/2005-ST dated 1.3.2005 as amended vide Notification No.19/2005-ST dated 7.6.2005 (Now rescinded).

AI Summary

Service tax exemption on job-work applies only where central excise duty is paid on the final product, otherwise service tax applies. Exemption from service tax on job-work is conditional and available only if central excise duty is paid on the final product; where the final product enjoys excise exemption, the job-work conditional exemption does not apply and service tax is attracted on the job-work.