Job work related service tax

[Guest]

Dear sir/ ma'am,

 

 i want to ask a query that a job worker whose work is not amounting to manufacturer then he is exempt form service tax if principal manufacturer is paying appropriate rate of duty.

 

And appropriate rate of duty means - 'duty payable on manufacturer or production under central or state Act, but shall not include Nil rate of duty or duty wholly exempt.'

 

My Query is that if the turnover of manufacturer is less than 150 lacks and he is  not paying any duty then job worker would liable to pay service tax ???

 

if there is proviso or explanation is given in this matter, please guide me.

 

Thanking you...

[NEERAJ KUMAR, RANCHI]

Surely not if the duty is exempted by way of threshold exemption, no service tax is liable. The goods still amounting to  manufacture  and excisable however not attracting duty by virtue of threshold exemption.

[JAMES PG]

ST liability has to be discharged by the job worker if his turnover is above Rs 10 lacs irrespective of the fact that manufacturer is enjoying SSI exemption of Rs 150 lakhs

[CASeetharaman KC]

If the work does not amount to manufacture then it would be catrgorised as a service and service tax would be payable once the job worker crosses the threshold limit of 10 lakhs. Registration needs to be applied for when he crosses 9 lakhs

AI Summary

Service tax liability for job work hinges on whether activity is manufacture or service and turnover exceeds threshold. Liability for service tax on job work depends on whether the job worker's activity constitutes manufacture or a service and on the job worker's own turnover relative to the statutory threshold; if the activity is a service, service tax and registration obligations arise once the job worker crosses the turnover threshold, and the principal manufacturer's small scale exemption does not necessarily relieve the job worker of that liability.