Applicability of service tax - Processing - job work

[BAL KRISHAN GARG]

Dear Madhwan & Mukesh Ji, Recalling of facts : A is processing B'sgoods intermediatary product in B's Factory on which B cleared the goods after duty .His labour obey the direction of A only & B is concerned with the processed goods only . there is no relation between labour and B . as liability under manpower there must be employee - employer relationship between A and Labour and labour is not employed contractually employed by the recipient but come under his direction.- F.No. B1/6/2005-TRU dated 27.7.05 , Hence S.tax not liable under man power.Supply means must not to be restricted to the goods must be out of premises & returned wherepremises in kilometers whether is it notpossible to give the goods for processing to Job worker in premises? May be i am not right but since we have to analysis the word meaning of supply . Here the intention of the law of supply at the intial stage we have to find I will be thankful you as you cleared many doubts.

[Mukesh Kumar]

kindly refer to reply carefully to your previous issues. If you able to prove that it is a job working activity and not the manpower supply activity, yes you are out of service tax net provided other conditions are satisfied. Only the detailed examination of contract terms and conditions and circumstances would help to determine the same.

[madhavvan n]

i fully endorse the views of mr. Mukesh kumar at the initial stage itself all the partculars have to be given so that a person reading it can get a full view of the transaction and then applying the relevant provisions in law and thereafter can give a clear decision

AI Summary

Job work versus manpower supply: processing at recipient premises must be classified by control and contract to determine service tax applicability. Applicability of service tax depends on whether processing of B's goods by A in B's factory is characterised as job work or as manpower supply. The described facts show labour directed by A, no contractual employer-employee relationship between B and labour, and a departmental reference suggesting absence of such a relationship argues against manpower supply. Classification requires detailed examination of contract terms, actual direction and control of labour, and the surrounding circumstances.