Service Tax Laibility

[kamal negi]

Hello Sir This is Kamal Negi my query is following:-

1) We are a excisable unit situated in sonepat (HR), can we do job work for a unit situated in Exempted Zone like Uttarakhand & Himanchal and what will be role for Service Tax.

2) We are not registered in Excise but registered with service tax, can we do job work of a excisable unit giving us material on terms of 62% recovery of 100% material at conversion charge of ₹ 8/- Per Kg. We are receiving material from franchise of excisable unit and sending material after processing to another job worker on behalf of excisable unit for further process. Please clear service tax role and if any other laibility.

Kindly reply sir.

Rgds

K.S.Negi

AI Summary

Manufacture determination: job work may attract excise duty and require central excise registration when processing amounts to manufacture.
Determination whether processing amounts to manufacture controls tax treatment: if the operations amount to manufacture, service tax is not applicable; otherwise service tax may apply. When finished goods are excisable but exempt under a notification, exemption for job-worked goods is conditional on the principal manufacturer paying duty; if the principal does not pay due to area-based exemption, the job-worker must pay central excise duty on goods up to the processes he undertakes and should register with Central Excise for manufacture and clearance.