Job worker getting job done from another job worker

[Murari Agrawal]

Dear Experts,

We are receiving raw materials for processing on Job Work & return to manufacturer. Some times we do not have capacity to process within time and we intend to send the raw materials to another job worker for getting the job done. Can we do so and if yes, what should be the formality.

Thanks.

[YAGAY and SUN]

Provision pertaining to this aspect has not specifically mentioned in the Central Excise Laws but which is not specifically denied is allowed under the law.  Henc, you can remove goods for jobwork on a challan and goods must come back to you within 180 days from the date of being removed.

Further, if jobworked goods are being used inturn in the manufacturing of final goods then no service tax would be levied by your sub jobworker.

[Murari Agrawal]

Thanks Mr Khatri. The job worked goods will be received by us and will be delivered to the manufacturer as such by us who will use these goods in manufacturing of final products. I hope Service tax is not payable.

[YAGAY and SUN]

Yes, but sub contractor may charge service tax on you.  please check this aspect also.

[Murari Agrawal]

Sir you being the expert pl give your opinion whether service tax should be charged by the sub job worker. Incidentally, the sub job worker is not regd under service tax. The sub job worker is known to us and if any liability arises on him, we will have to make it up. Kindly enlight.

AI Summary

Jobwork sub-contracting: sending inputs to another job worker permitted; goods must return within prescribed period and assess service tax risk.
The law does not expressly prohibit sending inputs received for jobwork to another job worker; removals should be on a challan and goods returned to the employing job worker within the prescribed period. If the sub jobworker's processing results in inputs being returned and delivered to the manufacturer for use in final manufacture, the work is treated as continuing jobwork, though a sub contractor may impose service tax and registration or liability issues may arise.