Levy of service tax - Job work

[Guest]

We are the manufacturer of automotible parts. We were getting job work onsome of our parts from outside party. Party was not charging the service tax since last two years on the job work. Now the job worker has received a noticc from excise department for levy of service tax on the total billing of last two years. Now job worker wanted to raise a bill on us for service tax amount. My question is whether we being manufacturer can take the Cenvet on service tax related to previous period(s)

[Surender Gupta]

I afraid, you may not be allowed to avail the cenvat credit of the service tax paid by the service provider on the basis of SCN

AI Summary

Manufacturer Unlikely to Claim Cenvat Credit for Service Tax on Outsourced Work, As Per Recent Notice A manufacturer of automobile parts outsourced job work to an external party, which did not charge service tax for two years. The job worker received a notice from the excise department to levy service tax on past billings and intends to bill the manufacturer for this tax. The manufacturer inquired about the possibility of claiming Cenvat credit for the service tax related to previous periods. The response indicated that it is unlikely the manufacturer can avail Cenvat credit based on the service tax notice received by the job worker.