TaxTMI 
TaxTMI 
Dear Sirs, We are filling our material in a hallow doors, where the doors are supplied by our customer. We have purchas order for filling charges but not as job work charges. Paying Excise duty on material involved in the transaction not paying Service tax amount. is there any complications in this transaction?.
Service tax applicability
25 Jan 2010 
2 Replies 
1300 Views Asked by
Service tax liability for processing depends on whether the operation amounts to manufacture or is a taxable service.
Whether service tax applies hinges on characterisation: if the filling operation in the processor's factory effects manufacture and excise duty is charged on value addition, it is treated as manufacture-not a taxable service. If instead the processor provides a service using excisable inputs that are not its finished goods, service tax may apply and CENVAT credit treatment must be considered. The supplier's excise status and application of CENVAT rules determine liability, and mixed transactions supplying material plus processing require factual classification. (AI Summary)
Whether service tax applies hinges on characterisation: if the filling operation in the processor's factory effects manufacture and excise duty is charged on value addition, it is treated as manufacture-not a taxable service. If instead the processor provides a service using excisable inputs that are not its finished goods, service tax may apply and CENVAT credit treatment must be considered. The supplier's excise status and application of CENVAT rules determine liability, and mixed transactions supplying material plus processing require factual classification. (AI Summary)