Service for own branch

[Prem Ruhela]

Dear Sir,

We have two manfacturing unit in one state but in different city with same name. i just want to know that if we provide job work to iind unit like machining then we should pay service tax on it or not.???????????  

 

[CA Rachit Agarwal]

Unlike Excise Duty, Service Tax liability arise at the time of providing taxable service to any person. Hence the rendering of service by one arm to the other arm does not amount to tax. A particular unit cannot be construed to be as person. Refer Section 68 of the Chapter V of the Finance Act.

Also refer Rule 2(1)(d) where it is defined "Person Liabile for paying tax" wherein person has been defined as company.

Also refer the the Case of MSPL Ltd, Karnataka High Court.

[YAGAY andSUN]

Service to Self is not taxable.

 

[NEERAJ KUMAR, RANCHI]

In this case please check if your both the units are registered under service tax having seperate registrationn no.. 2nd do you charge money for providing services by one unit to another unit.

If above is not the case you are not liable to pay service tax, if above is thee case you will have to pay service tax. Also ensure if you issue invoice to your other unit and there is money consiideration for such service, this will be leviable to service tax, otherwise it is not. Hope answered ur query.

AI Summary

Service to self not taxable; intra-company job work attracts service tax only if charged with consideration and separate registration. Service tax does not apply where one unit of the same legal entity provides services to another unit without charge; liability arises only when services are provided for consideration or to a distinct 'person.' If units have separate registrations and one unit invoices or charges the other for job work, service tax will be applicable; absent consideration or separate registration, intra-company job work is not taxable.