Inhouse Job Work v/s Service Tax

[Ashok Chopra]

Respected Forum,

we are 100% EOU and claiming Service Tax as Unavailed Cenvat. Some unregistered job workers are providing inhouse service to us more than Rs. 10.00 lac in a year.  Are they required to be registered as Service Tax Provider and charge service tax on their bill and are we required to pay service tax under Reverse Charge and claim the service tax paid as Unavailed Cenvat?

pls advice

[Joginder Pal]

The EOU is in India and the inhouse service given is in India, hence the Reverse Charge Machanism is not applicable in this case. Further the people providing you services are not job worker but are service providers to you. In case these inhouse services are required for the purpose of manufacture of goods for export or for export of service, your unit can claim refund under the provision of Rule 5 of Cenvat Credit Rule, 2004

AI Summary

Reverse charge not applicable to in country inhouse services; EOU may claim relief under Cenvat Credit rules. The in house services are rendered within India to an Indian EOU; therefore, the reverse charge mechanism does not apply. The persons rendering the activities are service providers rather than job workers. If the services are procured for manufacture of goods for export or for providing export of services, the EOU may claim relief under the Cenvat Credit Rules by seeking refund or adjustment rather than treating the tax under reverse charge.