We are manufacturer of biscuits in West Bengal and appointed an individual person in our factory premises for packing of biscuit packets in cartoons. We sale the biscuits so packed in cartoon. The person sends his men in our factory premises for such packing. The person raise monthly bill for his contracted charges. Say, Rs. 0.50 per cartoon or so on.
My question is -
1. Whether this work will be treated as job work and/or be treated as manufacturing activity?
2. Whether Service tax is payable on the above work?
3. Who will pay the Servivce Tax?
4. Which section or notification dels in this issue.
Debate on Service Tax for Biscuit Packing: Job Work or Manufacturing? Potential Exemption Under Central Excise Act. A manufacturer in West Bengal queries about the applicability of service tax on packing biscuits within factory premises. The discussion revolves around whether this activity constitutes job work or manufacturing, and who is liable for service tax. Responses suggest that the service might be classified under manpower supply, subject to partial reverse charge mechanism, with service tax applicable at 12.36%. However, others argue that it is a manufacturing activity exempt from service tax under the Central Excise Act, as it involves the execution of work, not manpower supply. The consensus leans towards exemption due to its classification as manufacturing under excise law. (AI Summary)
TaxTMI 
TaxTMI 
TaxTMI 
