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

Job Workers Must Pay Service Tax If Turnover Exceeds 10 Lakhs, Even If Principal Manufacturer Is Exempt A query was raised regarding the service tax liability of a job worker whose activities do not constitute manufacturing, particularly when the principal manufacturer is exempt from duty due to a turnover below 150 lakhs. The responses clarify that if the principal manufacturer benefits from a threshold exemption, the job worker is not liable for service tax. However, if the job worker's turnover exceeds 10 lakhs, they must pay service tax, regardless of the manufacturer's exemption. Registration is required when the job worker's turnover surpasses 9 lakhs.