Service tax on job work within manufacturer's premises

[Pawan Kumar]

Dear Experts,

My query is that if an individual has taken some job work in the same premises as of manufacturer for stitching the footwear components provided by the manufacturer, is the job worker liable for service tax.

Here manufacturer is in excise free zone in Himachal Pradesh and excise duty is exempted on final product till 2020.

Also, job worker is using his own labour and managing it but using machines and equipment of manufacturer's.

Pls, confirm. Thanks.

AI Summary

Service Tax Applies to Job Worker Stitching Footwear in Excise-Free Zone; Not Considered Manufacturing Process A query was raised regarding the applicability of service tax on a job worker who stitches footwear components within a manufacturer's premises in an excise-free zone in Himachal Pradesh. The manufacturer provides machines and equipment, while the job worker uses his own labor. Experts responded that service tax is applicable since the process does not constitute manufacturing, which would exempt it from service tax. The job worker, not the manufacturer, is liable to collect and pay the service tax, even if it hasn't been collected previously. The exemption applies only if Central Excise duty is leviable, which is not the case here.