Applicability of Service Tax on Jobwork on goods exported.

[Guest]

if an individual undertakes a jobwork on behalf of other individual and the goods are exported whether service tax is applicable

[Surender Gupta]

Your query is not clear. Who wants to avail the exemption? In this particular issue it appears that the Principal is exporting the goods on which certain processes undertaken by the Job Worker. In service tax, there is no provision which enable the job worker to avail the benefit of exemption on the strength that the goods have been exported ultimately.

[Guest]

No service tax is payable on ‘any process amounting to manufacture or production of goods’ by your job-worker, as that activity falls under the negative list under Section 66D (f) of the Finance Act, 1944. Also, S. No. 30 (c) of notification no 25/2012 dated June 20, 2012 exempts ‘carrying out any intermediate production process as job-work in relation to any goods on which appropriate duty is payable by the principal manufacturer’. 

If there is NIL duty on export then sevice tax willbe applicable on job work otherwise it will be cover under S.No. 30(c). 

AI Summary

Debate on Service Tax Applicability for Job Work on Exported Goods Under Finance Act, 1944 and Notification 25/2012. A discussion on the applicability of service tax on job work for goods exported addresses whether service tax is applicable when an individual performs job work for another, and the goods are exported. One participant notes that job workers cannot claim exemption based on the goods being exported. Another highlights that no service tax is payable if the job work involves manufacturing or production, as it falls under the negative list of the Finance Act, 1944. Additionally, notification 25/2012 exempts certain job work processes if the principal manufacturer pays the appropriate duty, but service tax applies if export duty is nil.