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

Debate on Service Tax Applicability: Job Work vs. Manpower Supply Underlines Importance of Contract Details and Transaction Specifics. A discussion on the applicability of service tax to processing and job work activities involves two parties, A and B. A processes intermediary products for B in B's factory, with A's labor following A's directions. B is only concerned with the processed goods, and there is no employee-employer relationship between B and the labor. Mukesh Kumar suggests that if the activity is proven to be job work rather than manpower supply, it may not be subject to service tax, contingent on contract terms and conditions. Madhavvan agrees with Mukesh's assessment, emphasizing the need for detailed transaction particulars.