Reverse Charge versus unregistered Job worker

[Ashok Chopra]

Respected Forum,

 

We being manufacturer-exporter of garments are getting job work like printing, dyeing, processing and fabricating from various jobworkers they are unregistered and not charging any service tax on their bills, some of them have done jobwork more than Rs. 10.00 Lac and not charging service tax on their bill.

Pls advice

1.  Whether any liability of service tax is lies upon me or not under reverse charge in case of jobwork done by them is less than Rs. 10.00 Lac.

2. Whether any liability of service tax is lies upon me or not under reverse charge in case of job work done by them is more than Rs. 10.00 Lac.

3. If the liaibility lies upon me, being an exporter should i pay service tax and also advice me how can i get the benefit of service tax

 

regards

 

 

[YAGAY andSUN]

These services are falling under Mega Exemption Notification  vide serial no 30 (a) i.e. agriculture, printing or textile processing.

and

(c) any goods on which appropriate duty is payable by the principal manufacture.

[RadheyShyam Mangal]

I agree with Mr Pradeep Khatri that you are entitled for exemptions under Notification No 25/2012 ST as on garment manufacture the duty is payable by manufacture. Therefore the is no question of service tax liability on such job work.

[RadheyShyam Mangal]

I agree with Mr Pradeep Khatri that you are entitled for exemptions under Notification No 25/2012 ST as on garment manufacture the duty is payable by manufacture. Therefore the is no question of service tax liability on such job work.

AI Summary

Reverse charge liability exempted where jobwork in textile processing falls under mega exemption, so principal not liable for service tax. Where outsourced printing, dyeing, textile processing or similar jobwork relates to goods on which appropriate duty is payable by the principal manufacturer and falls within the Mega Exemption Notification, Notification No 25/2012 ST exempts those jobwork services from service tax; therefore no reverse charge liability arises on the principal manufacturer even if jobworkers are unregistered or invoice amounts exceed a threshold.