Jobworker giving goods to another jobwork for processing

This query is : Resolved

sonal (Querist)
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26 October 2012 company ABC is engaged in the business of manufacturing pressure vessels on jobwork basis for the principal manufacturere. the pressure vessels are directly dispatched from the jobworker's (ABC) premises to the buyer. the comapny in not requred to pay excise as the principal manufacturer is an excisable unit. moreso, the turnover of this company ABC is also below 150 lakhs.
now due to excess load, ABC wishes to give the goods given by the principal manufacturer to another jobworker(XYZ) for processing or manufacturing. XYZ will process the goods or manufacture the pressure vessels on behalf of ABC which ABC will send to the buyer.

I want to know the excise and service tax implication for the company XYz in both cases. i.e. when it does a part of the process for ABC or manufactures the entire pressure vessel for ABC

Arun Kumar Singh

Arun Kumar Singh (Expert)
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26 October 2012 Any goods on which appropriate duty is payable by the principle manufacture, service tax is exempt under the mega exemption notification no. 25/2012-ST. If process does not amounts to manufacture or production of goods then service tax will be applicable.

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