Service tax applicability on job work of preparing gold ornaments from pure gold

[Guest]

Some speaker in a recent seminar suggested that there is one notification in service tax by which service tax is payable on job work on which excise duty is exempted or nil though it comes within the definition of manufacturing. whether service tax is payable on job work of preparing gold ornaments from pure gold.

[Surender Gupta]

I do not agree which the view that where the job work is not falling within the preview of notification no. 8/2005, the same become taxable even if the result of activity undertaken by the job worker is amount to manufacture. Definition of business auxiliary service under clause 65(19) specifically excludes the activity which is amount to manufacture from the ambit of service tax. In such a situation there is no need to refer to a exemption notification.

[Madhukar N Hiregange]

If manufacture takes place as per central excise no servic etax is liable. No service tax since exempted under notification21/2003.

AI Summary

Debate on Service Tax Applicability for Gold Ornament Job Work Citing Exemptions under Notifications 8/2005 and 21/2003 A query was raised about the applicability of service tax on job work involving the preparation of gold ornaments from pure gold, despite the exemption of excise duty. One respondent argued that job work resulting in manufacturing is excluded from service tax under the definition of business auxiliary service, referencing notification no. 8/2005. Another respondent supported this view, stating that if manufacturing occurs as per central excise, no service tax is applicable, citing exemption under notification 21/2003.