application of service tax

[NARESH BANSAL]

Respected Sir,

we are offset printers of educational books. Doing job work only .The paper is supplied by publisher and he is paying excise duty on paper.But printing ink, plates and chemicals are used by our side.Further the binding is done by another person.

Sir, whether service tax is applicable or not

[YAGAY and SUN]

I feel that Works Contrat Tax under Rajasthan VAT Act, will be applicable on such transaction since the goods like ink, plates and chemicals are being used in the executing the works contract.

Service Tax would not be applicable.

[Vijay kumar]

In terms of sl.no.30(c) of Notification No. .25/2012-ST, job work involved on any goods on which duty is paid by the principal manufacturer is exempted from service tax. In your case, pl ascdertain from the principal mfr whether he is paying duty on the educational books (perhaps books are exempted from payment of excise duty). If for any reason no duty is paid, then you are liable to pay service tax on the gross value charged for your service.Credit of duty paid on paper can be taken, but its value has to be included for the purpose of payment of service tax.

AI Summary

Service tax applicability on job work: exempt if principal has paid excise duty; otherwise taxable on gross value.
Two forum responses differ on tax characterization. One treats the printing job as subject to Works Contract Tax under local VAT because printer-supplied materials are used and denies service tax applicability. The other relies on the job work exemption: if the principal manufacturer has paid excise duty on the goods, job work is exempt from service tax; if no duty is paid, service tax is payable on the gross value. Credit of duty paid on supplied paper may be taken but its value must be included in the taxable value where service tax applies.