Service tax on assembly & packing works contract.
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
20 April 2015
Dear Sir,
We are an Auto Parts Manufacturing company. We are paying excise duty on all our final products. We are getting some in house job work (like bearing assembly & packing) done on our components on piece rate basis from a contractors. Contractor supplies labour for the job work at our plant and raises bill on piece rate basis. The Mega Notification 25/2012 in para 30 (c) says that any goods on which appropriate duty is payable by the principal manufacturer; if you are paying duty then no need to pay the service tax.
Please give your opinion whether we are liable to pay service tax under reverse charge mechanism or not ?
Thanks,
R.J.Dave.
We are an Auto Parts Manufacturing company. We are paying excise duty on all our final products. We are getting some in house job work (like bearing assembly & packing) done on our components on piece rate basis from a contractors. Contractor supplies labour for the job work at our plant and raises bill on piece rate basis. The Mega Notification 25/2012 in para 30 (c) says that any goods on which appropriate duty is payable by the principal manufacturer; if you are paying duty then no need to pay the service tax.
Please give your opinion whether we are liable to pay service tax under reverse charge mechanism or not ?
Thanks,
R.J.Dave.
20 April 2015
As you are a manufacturing company and paying excise duty on final product, you are not liable to pay service tax on job work being part of manufacturing activity.
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