Exemption - Notification 8/2005

[Asked by Guest]

My query is regarding the job work. our company undertakes painting job from maufacturer and returns the material after the job is done. As peer Notification No.8/2005, exemption is provided to taxable service of production of goods on and for behalf of a client referred iin sub clause (v)0 of clause 19 of section 65 of the  Finance Act, 1994, froom payment of Service Tax. i would like to know whether while filing ST Return the value of service provided has to be mentioned inthe field "Amount billed for exempted services other than Export" in Point No.4. and corresponding notification no. Our company is registered for providing Business Auxillary Servicce, and therefore will the same be covered under the aforesaid service. The client has provided a letter stating that the item sent for job work further undergoes some production work. can anyone guide me on this issue.

[Surender Gupta]

In the business auxiliary service, any job working activity which is not amounting to manufacture is liable to service tax. However, notification 8/2005 further exempts such service, if the person sending the material is paying excise duty on the final product. In ST-3, it is specific requirement that the bill for exempted services should be shown in the respective column.

AI Summary

Exemption for job work: service tax relief where principal pays excise on final product; disclose exempt billing in the return.
Exemption applies to job work services producing goods for a client when the person sending the material pays excise duty on the final product; otherwise job work falls under Business Auxiliary Service and is taxable. Providers must show bills for exempted services in the ST return column for "Amount billed for exempted services other than Export" and reference the applicable notification.