Labour Job

[SURYAKANT MITHBAVKAR]

We are manufacturer of pharma machine registered under Excise Act.

We are having one associate company manufacturing pharma machine registered under Excise Act

Can we do labour job for each other issuing service tax invoice and using 214/86 Challan for movement of material.

AI Summary

Manufacture vs service tax: job work is excise-liable if process amounts to manufacture, otherwise service tax applies.
Whether labour job work between associated manufacturers attracts excise or service tax depends on whether the process amounts to manufacture. If it does, excise duty applies and Notification No.214/1986 CE can exempt the job worker provided the principal manufacturer undertakes to pay duty and can return goods without duty; if not, service tax applies unless an intermediate production process exemption applies with the principal paying appropriate duty.