Service tax on job work within manufacturer's premises

[Asked by Guest]

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 liability: job work stitching within manufacturer premises is taxable and payable by the job worker.
Mere stitching/assembly that does not amount to manufacture is a taxable service; the job worker is the taxable person and must collect and deposit service tax. Using the manufacturer's machines or locating the work in an excise-free area does not exempt the service. Exemption from service tax arises only if the process is a manufacture subject to central excise duty and the applicable service-tax exemption notification covers it.