Job Work from Sister Concern

[Mridul Sethi]

Sir,

We 2 Manufacturing Sister Concerns having units in Punjab & Haryana with same name. If we do job work from each other, then are we liable to pay service tax or not. Also if we are liable to pay service tax, then threshold limit of service tax will be considered or not, if the manufacturing unit is LTU.

AI Summary

Manufacturers Question Service Tax on Job Work; Exemption Possible if Excise Duty Paid, Referencing Mega Notification & 214/86-CE. Two manufacturing sister concerns located in Punjab and Haryana are inquiring about the applicability of service tax when performing job work for each other. They question whether service tax is applicable and if the threshold limit applies to them as a Large Taxpayer Unit (LTU). Responses indicate that if excise duty is paid on the final products, service tax is not required, referencing the Mega Notification and Notification No. 214/86-CE. If excise duty is not applicable, service tax liability arises. The threshold limit applies only once if the units are considered the same or as an LTU, per Notification No. 33/2012-ST.