WE BOTH PRINCIPAL MANUFACTURER AND JOB WORKER ARE TWO COMPANIES OF THE SAME GROUP HAVING DISTANCE BETWEEN 200 K.M IN THE SAME STATE. BOTH ARE MANUFACTURER OF EXCISEABLE GOODS AND GOODS PRODUCED COMES UNDER PRODUCTION AS PER EXCISE ACT. THE PRINCIPAL MANUFACTURER WILL PAY EXCISE DUTY AFTER THE RECEIPT OF GOODS FROM JOB WORKER AT THE TIME OF CLEARANCE OF THE SAME FROM THEIR UNIT AS IT IS OR AFTER USE OF THE SAME IN THEIR FINAL PRODUCT. NOW OUR QUERY IS 1) WHETHER WE ARE EXEMPT FROM SERVICE TAX AND 2) WHICH RECORD WE BOTH THE COMPANIES SHOULD HAVE MAINTAINED TO AVOID ANY PROBLEMS CREATED AT THE TIME OF SERVICE/EXCISE TAX AUDIT. PLEASE SUGGEST.
REGARDS,
WADHWA
Companies Query Service Tax Exemption; Notification 25/2012 Clarifies Job Work Exemption for Excisable Goods. Two companies within the same group, located 200 km apart in the same state, are involved in manufacturing excisable goods. The principal manufacturer queries whether they are exempt from service tax and what records should be maintained to avoid issues during service or excise tax audits. The response clarifies that under notification no. 25/2012, services rendered as job work in relation to goods on which the principal manufacturer pays appropriate duty are exempt from service tax. It is advised to follow the 57F4 procedure for excise matters and consult professionals for documentation requirements. (AI Summary)
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