Capital goods repairing under job work challan

[yateen vyas]

Sir,

We are manufacturer we are having mould for our final product.

We have send our mould for repairing purpose outside factory under job work challan.

Now i have 2 question :-

1. Whether repairing of capital goods outside plant is allowed or not,if yes how i can send capital goods (document).

2.In case we are sending outside under job work challan although we are sending it for repairing does it will attract serivce tax for party who is repairing mould.

3.merely sending a capital goods under job work challan will be understood as a job work.

[Nash Industries I Pvt Ltd]

CG can be sent outside the factory for repair as per rule 4 (5) (a) (ii) of CCR, 2004.

Service Tax is applicable under Repair & Maintenance Services.

Regards

S.Ramaswamy

[KASTURI SETHI]

Dear Querist,

I concur with the views of Sh.S.Ramaswamy, Sir. I further add that Service Tax is applicable under Works Contract Service read with Notification No.24/12-ST and 11/14-ST dated 11.7.14.

[YAGAY and SUN]

Such capital goods must be returned back with in two years.

[Himansu Sekhar]

Sir,

Regasrdfing query 3 It does not matter whether this is a job work or not. What matters for you is the treatment of cenvat credit. As pointedby experts s.tax is leviable on the service providers. Such service tax will be available to you for taking credit

[YAGAY and SUN]

Prescribed time limit for returning of moulds is also important otherwise CENVAT credit would be required to be reversed.

AI Summary

Capital goods repair outside factory: service tax applies to repairer and CENVAT credit depends on timely return of goods.
Repairing capital goods outside the factory is permitted and may be effected under a job work challan; service tax is leviable on the repair provider (as Repair & Maintenance or Works Contract Service) and the tax is generally available as credit to the manufacturer, but the repaired capital goods must be returned within the prescribed period or the manufacturer will have to reverse CENVAT credit.