Exemption of job work from service tax

[BAL KRISHAN GARG]

A is doing job work on B's goods in the premises of B alongwith his labour & raising bills only on completed pieces on monthly basis. Firstly S.t.authority had issued notice under man.rec.agency & i have submitted copy of bills & copy of A in the books of B & form 16 A & Copy of Bank statement .it was confirmed by B in writing to the authority .whether the dept. can assume it as man.rec.agency .As invoice is raised on pieces completed not on the basis of no.of labour .whether dept.can do ? My second query is whether is it compulsory that the material must be moved from factory & backto factory after processing ? job work is done on mat.of B & after processing B is paying excise duty i.e. In other words the exemption under r Notification No.8/2005-ST that the job work is completely exempt from service tax material which is excisable and the duty paid by B as in the case. I want details of some decided cases on both the facts citied above .

Thanks

[madhavvan n]

since the work is being done at customers end where is the question of return of material A is performing a labour job in customers premises material is being given by B to A there is no movement of material outside the factory premises it is only an activity which B has outsourced within its factory premises which otherwise would have been done by B itself the department is right in their contention in levying tax under manpower rec agency as it is only labour which is being supplied the billing on piece basis is a method of deriving at value ultimately the labour has to perform the work and make pieces and the measure of payment is on piece basis since B is manufacturing the product it is liable for excise duty B can avail cenvat credit on the billing by A. hence job work theory is not relevant here

[Mukesh Kumar]

I agree with the views expressed by Mr. madhawan since as per your query, it appears that you are working as a labour contractor. To be known as job worker, you must perform all the activities in your name and discharge duties of excise or at least become deemed manufacturer for the processing of goods. But, since the matter is technical one, you may fight the issue on the basis of period of limitation of one year under section 73 of the Finance Act, 1994 (Service Tax). On the other side, once you charge service tax on you bill, the manufacturer would take cenvat credit of the same, therefore there is no issue of double taxation.

AI Summary

Service Tax Exemption Debate: Is Job Work by A on B's Premises Taxable as Manpower Supply? A discussion on whether job work performed by A on B's premises is exempt from service tax under Notification No. 8/2005-ST. A performs labor on B's goods without moving materials outside B's factory, raising questions about whether this constitutes a manpower recruitment agency service. Respondents argue that since A supplies labor and bills on a piece basis, the service may be taxable as manpower supply. Additionally, they suggest that B can claim CENVAT credit on service tax billed by A, and advise considering the one-year limitation period under Section 73 of the Finance Act, 1994.