Cenvat credit of service tax paid on job charges

[samaresh jana]

An assessee is having its factory lacks facility of galvanizing,while it's order is to supply galvanized goods.He sends semi finished goods to a job work painting and galvanizing. The assessee also paid service tax on the job charges. Can the assessee avail credit of that service tax paid on job charges? There is also a question that whether the assessee has to paid service tax on job charges paid for painting and galvanizing.

[Mahaganapathi V]

Job work done by an intermediate person is exempted under service tax under mega exemption if the principal manufacturer pays the appropriate duty to his finished product. Sale of finished product is not service taxable but excise taxable.

 

AI Summary

Job work mega exemption bars service tax on intermediate job charges when principal pays duty, affecting Cenvat credit. Job work carried out by an intermediate person is covered by the mega exemption where the principal manufacturer pays the appropriate duty on the finished product; consequently such job work is not treated as a taxable service. The sale of the finished galvanized products is excise-taxable rather than service-taxable when the principal manufacturer discharges excise on the final product.