Reg:service tax on job work
This query is : Resolved
31 August 2012
Dear Sir,
We are manufacturer of transformer and supplying raw material (Ms plate) to job worker for manufacturing of tank(semi finished).He is using consummbles(electrodes),man power & electricity of his own in his plant. As we are in ED exemption Zone (Uttarakhand)& our job worker also in uttarakhand(ED exemption Zone), I want to know weather job work attract service tax or VAT on it.
We are manufacturer of transformer and supplying raw material (Ms plate) to job worker for manufacturing of tank(semi finished).He is using consummbles(electrodes),man power & electricity of his own in his plant. As we are in ED exemption Zone (Uttarakhand)& our job worker also in uttarakhand(ED exemption Zone), I want to know weather job work attract service tax or VAT on it.
31 August 2012
send electrodes also ( or just show that electrodes also supplied by you) and they will charge no tax on you.
31 August 2012
Sir,
Now job worker exemption period given by Uttarakhand govt is over and he has come out of ED exemption facility. In this case please answer the above said query.
Now job worker exemption period given by Uttarakhand govt is over and he has come out of ED exemption facility. In this case please answer the above said query.
31 August 2012
Sir,
Now job worker exemption period given by Uttarakhand Govt is over and he has come out of ED exemption facility. In this case please answer the above said query
Now job worker exemption period given by Uttarakhand Govt is over and he has come out of ED exemption facility. In this case please answer the above said query
20 July 2025
Regarding service tax and VAT applicability on job work in your scenario:
1. Service Tax on Job Work (Pre-GST Regime)
Job work is generally considered a service and is liable to service tax unless exempted.
If you supply raw materials (like MS plates) to the job worker, and the job worker carries out manufacturing or processing, service tax on job work is payable by the job worker if their turnover exceeds the threshold.
If consumables (like electrodes), manpower, and electricity are used by the job worker himself, the job worker is liable to pay service tax on the job work service provided to you.
If you also supply consumables (e.g., electrodes) to the job worker, the job worker can claim exemption from service tax on job work, provided such consumables are also supplied by you, as per Notification No. 30/2012-ST.
2. VAT on Job Work
VAT is generally applicable on the sale of goods and not on services.
Since job work is a service, VAT does not apply on job work charges.
However, VAT may be applicable on the raw materials or finished goods sold.
The job worker may be required to pay VAT on any goods sold by him.
3. Regarding ED Exemption Zone Impact
Since your and the job worker's units were under the Excise Duty exemption zone, excise duty was not applicable.
Now, as the job worker’s exemption period has expired, they will have to pay service tax on job work services provided.
You may be liable to pay service tax if you yourself are providing taxable services, but in your case, the job worker provides the service.
1. Service Tax on Job Work (Pre-GST Regime)
Job work is generally considered a service and is liable to service tax unless exempted.
If you supply raw materials (like MS plates) to the job worker, and the job worker carries out manufacturing or processing, service tax on job work is payable by the job worker if their turnover exceeds the threshold.
If consumables (like electrodes), manpower, and electricity are used by the job worker himself, the job worker is liable to pay service tax on the job work service provided to you.
If you also supply consumables (e.g., electrodes) to the job worker, the job worker can claim exemption from service tax on job work, provided such consumables are also supplied by you, as per Notification No. 30/2012-ST.
2. VAT on Job Work
VAT is generally applicable on the sale of goods and not on services.
Since job work is a service, VAT does not apply on job work charges.
However, VAT may be applicable on the raw materials or finished goods sold.
The job worker may be required to pay VAT on any goods sold by him.
3. Regarding ED Exemption Zone Impact
Since your and the job worker's units were under the Excise Duty exemption zone, excise duty was not applicable.
Now, as the job worker’s exemption period has expired, they will have to pay service tax on job work services provided.
You may be liable to pay service tax if you yourself are providing taxable services, but in your case, the job worker provides the service.
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