Service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 September 2011 Dear Experts

We are manufacturers of exciseable goods and a part of manufacturing work is outsourced for job work. whether service tax on job work will be chargable.

If not under which rule

Thanks in advance

U S Sharma

U S Sharma (Expert)
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02 September 2011 if the goods are send under rule 4(5)a of CCR2004, covering challan of job work prescribed under central excise, or 214/86, then the job worker will not charge service tax,

condition is that the principal manufacturer will clear the goods on payment of duty or export under bond,

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Querist : Anonymous

Querist : Anonymous (Querist)

02 September 2011 Is this Notification is applicable

Notification No08/2008-ST dated 01.03.2008

Pls clarify

U S Sharma

U S Sharma (Expert)
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02 September 2011 08/2008 notification holders can not avail benefit, as the goods are not duty paid at the point of clearance.

read the article for clearing your doubts

https://www.caclubindia.com/articles/job-work-under-central-excise-2116.asp

Querist : Anonymous

Querist : Anonymous (Querist)

02 September 2011 we are manufacturing exciseable goods and we have recevied exciseable goods for job work.

after complition of Job work we have issued jobwork invoice without Service tax, now customer is asking for declaration from our side for non applicability of service tax & to release payament.

we have not registered with serice tax and this is the first jobwork invoice issued in this FY 2011-12 which is amounted to Rs 30000/-

Kindly help how to give declaration

Thanks In advance

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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24 July 2025 You're in a common but sensitive situation — you’ve issued a **job work invoice without service tax**, and now the customer is asking for a **declaration** confirming **non-applicability of service tax**, in order to process your payment.

Let’s clarify your legal position and provide you with a **declaration format**.

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## ✅ Legal Basis: Why Service Tax Is Not Applicable on Your Job Work

### 🏭 Scenario:

* You are a **manufacturer of excisable goods**.
* You have received **excisable goods for job work**.
* The processed goods are returned to the principal manufacturer under **Rule 4(5)(a)** of **CENVAT Credit Rules, 2004**.
* You are not registered under service tax.
* Value of service provided so far in FY 2011–12 is ₹30,000.

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### ✅ Exemption from Service Tax — 2 Legal Grounds Apply:

### 1. **Job Work under Rule 4(5)(a), CCR, 2004**

* As per **CBEC Circulars** and **Notification No. 214/86-CE**, job work **does not attract service tax** when:

* Inputs are sent under prescribed challan
* Final goods are cleared on payment of **central excise duty** or **under bond for export**

✅ **Conclusion**: Job work is **not a taxable service** in this case.

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### 2. **Small Service Provider Exemption** – **Notification No. 6/2005-ST** and **No. 8/2008-ST**

* If your **aggregate value of taxable services in a financial year is < ₹10 lakhs**, you're **exempt from service tax**, provided you haven't crossed this limit in previous year or opted out.

✅ Your current year turnover from services is ₹30,000 → **you are within the ₹10 lakh limit**.

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## ✅ Declaration Format for Non-Applicability of Service Tax

You can issue a declaration like the following on your letterhead:

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### 📄 **Declaration for Non-Applicability of Service Tax**

**To,**
\[Customer Name]
\[Customer Address]

**Subject:** Declaration Regarding Non-applicability of Service Tax on Job Work Charges

Dear Sir/Madam,

This is to certify that we, **\[Your Company Name]**, are engaged in job work processing of excisable goods sent to us under the provisions of **Rule 4(5)(a) of the CENVAT Credit Rules, 2004**.

We confirm the following:

1. The goods received for job work are **excisable**, and the principal manufacturer will clear the final products either:

* On payment of excise duty, or
* Under bond/letter of undertaking for export

2. In view of the above, and as per **Notification No. 214/86-CE dated 25.03.1986**, the activity undertaken by us does **not constitute a taxable service** under the Finance Act, 1994.

3. Additionally, our total value of taxable services during the current financial year **does not exceed ₹10,00,000**, and hence we are also eligible for **Small Service Provider exemption** under **Notification No. 6/2005-ST** / **8/2008-ST**.

Therefore, **no service tax is applicable** on the job work invoice issued by us for ₹30,000.

This declaration is issued on your request for your internal records and payment processing.

Thanking you,
Yours faithfully,

**For \[Your Company Name]**
Authorized Signatory
\[Name]
\[Designation]
\[Date]
\[Place]

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Let me know if you want a **Word or PDF version** of the above, or need to include your **GST or PAN info** for other documentation purposes.

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