Service Tax on Job charges

[kiran pai]

Dear Sir, We are the leading manufacturer of Garments in India. Some times we under take garment job work from the out side parties. Our sales dept. raise invoice for the job work as 'finishing and packing' Job charges only. And applying 10.3% Service tax under the category of Business Auxiliary Services. Now please let me know is it correct what we are charging or wrong.

AI Summary

Garment Manufacturer Questions 10.3% Service Tax on Job Work; Check Central Excise Act Section 2(f) for Manufacturing Criteria. A garment manufacturer in India inquired about the correctness of applying a 10.3% service tax on job work invoices categorized as 'finishing and packing' under Business Auxiliary Services. The response advised checking the excise applicability under the Special Procedure for Textile & Textile Articles according to Central Excise Law. If the job work does not qualify as manufacturing under Section 2(f) of the Central Excise Act, 1944, then the service tax charged is appropriate.