service tax on manufacturing job work

[N M JAIN]

We are pharmaceutical manufacturing company. We are processing one of our customer's raw material and supplying them finished herbal drugs. The customer is not under registration with central excise whereas we being in Uttarakhand are exempt from levying excise duty.

Our specific querry is whether we are liable to charge service tax on job work done by our Plant ?

 

AI Summary

Manufacture exclusion from service tax may shift levy to excise duty on job-work clearances under valuation rules.
Processes amounting to manufacture are excluded from service tax under the negative list entry, and exemption from central excise does not change that position. When goods are produced by a job-worker for a principal, Rule 10A prescribes excise valuation: transaction value at removal where sold by the principal, normal transaction value where removed for sale from another place, and otherwise application of valuation rules mutatis mutandis; transportation cost is excluded and "job-worker" is defined as one manufacturing on inputs supplied by the principal or an authorised person.