Service Tax on Labour Charges

[Asked by Guest]

1. We are manufacture of power driven pumps and we send our pumps to job worker for packing. The packing material is supplied by us. Job worker only do the packing activity.

He is raising invoices for labour charges along with Service Tax.

Is service tax applicable on only labour charges. If yes, kindly provide documentory evidence.

 

2. Also we receive some services from abroad on which we are paying service tax.

Do we have to pay this service tax only through GAR7 (as like GTA payment) or we can use the service tax credit availed with us for payment of this service tax.

Prakash Patil

9833308491

AI Summary

Reverse charge on imported services requires payment by receiver via GAR challan, creditable if treated as input service.
Service tax applies to packing activities by a job worker: labour charges and packing material supplied free are taxable as packaging services. Tax on imported or specified services payable by the receiver under the reverse charge mechanism must be paid in cash through the appropriate challan, but may be taken as Cenvat credit if the service is an input service. Packing by job workers is not taxable when goods are returned and cleared on payment of duty; exemptions may otherwise render the packing service taxable.