TaxTMI 
TaxTMI 
We are manufacturers of auto parts and pay full excise duty on removal of our final products. Please clarity whether mega exemption notification no. 25/2012 has to be compulsorily availed or it is optional. Some of our Job workers who are covered under serial no. 30 (c) of this notification but do not want to avail this exemption thus charging service tax on their bills. If we avail CENVAT credit of the same, will it be in order or we should compel our job workers to compulsorily avail this notification and do not charge service tax on thier bills raised to us. Please clarify.
Mega Exemption notification 25/2012-Compulsion or optional
07 Aug 2012 
5 Replies 
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Exemption under mega notification may be optional by wording; paying service tax preserves CENVAT credit for recipients.
Whether exemptions under the mega notification are compulsory or optional depends on the notification's plain wording and conditions. If a job worker charges service tax, the recipient generally may take CENVAT credit; if the notification mandates exemption, the service provider may not validly charge service tax, and availing the exemption can trigger credit reversal or payment obligations under Rule 6 of the CENVAT Credit Rules. (AI Summary)
Whether exemptions under the mega notification are compulsory or optional depends on the notification's plain wording and conditions. If a job worker charges service tax, the recipient generally may take CENVAT credit; if the notification mandates exemption, the service provider may not validly charge service tax, and availing the exemption can trigger credit reversal or payment obligations under Rule 6 of the CENVAT Credit Rules. (AI Summary)