Service Tax on Job Work-Goods Exempt from Excise Duty

[PANKAJ GROVER]

A job provider (A) located in Baddi is providing Jobwork services to a manufacturing company (B) located in Baddi. The job receiver company is exempt from charging Excise duty on goods manufactured as it is located in Baddi,HP. Whether the job provider need to charge Service Tax on Job work charges under bussiness Auxiliary Services or the services are non chargeable.

 

With Best Regards

RAPG & Co.

Chartered Accountants

[YP SOOD]

The units located in HP, either newly established or which have done expansion/ capital investments more than the minimum specified limits after 2003 are exempt from central excise duty for 10 years under notifications no. 49/2003 and 50/2003 under the CE TA 1985.Exemption  from IT  for specified years under the IT Act is also available. No parrralel exemption from ST under the Finance Act 1994 for such CE exempted units is availale.In the absence of such an exemption,service tax is leviable and required to be paidI .It has been judicially held that exemption from tax provided under one Act can not be availed under any other Act  till specifically provided under other those Acts also.

[NEERAJ KUMAR, RANCHI]

There is no such exemption from service tax. Central excise and service tax although collected by the same department however both are guided by different set of rules and acts

[Guest]

DEAR SIR,

IF OUR TURN OVER IS AS UNDER CAN WE APPLY FOR EXCISE REGISTRATION

​EXEMPTED SERVICE             RS   1.35 CR

TAXABLE SERVICE               RS     2.50 CR

SALE OF FINISHED GOODS  RS     0.70 CR

TOTAL                                   RS    4..55 CR

PLEASE GIVEN THE SUGGESTION

REGARDS

RAJENDRA THAKUR 

[Mahir S]

As regards excise registration, the same is not required in your case, as the vale of finished goods cleared is less than rupees one hundred and fifty lacs,

Refer SSI exemption Notification, with effect from 1/4/2003 for units not availing CENVAT credit - 008/2003 - Dated 1-3-2003 - CE for further clarification.

Also manufacturing of finished goods is different from service tax and their taxable values are not required to be clubbed together.

AI Summary

Service tax on job work remains leviable even if the recipient's goods are exempt from excise duty. Exemption from central excise for a manufacturing unit does not confer exemption from service tax on job work; in the absence of express provision extending excise relief, the job provider remains liable to charge and pay service tax, because central excise and service tax are governed by separate statutes and an exemption under one Act does not apply to another.