Service tax on Job Work

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This discussion clarifies the excise duty and service tax implications for job work. It explains that job workers are exempt from excise duty if the principal manufacturer pays their liability, as per notification 214/86-CE. Service tax is not applicable if the job work constitutes 'manufacture' or if the principal manufacturer pays the appropriate excise duty on the final goods, referencing notification 30/2012-ST.

MAHESHA R

MAHESHA R (Querist)
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26 March 2021 Dear Expert
Kindly advise we are manufacturer registered under Central excise we have made Job Work and Excise sale in the year 2016-2017 and declared under Exempted sales for Job Work sales in vat 100 made to Central excise registered customer.
Now the Sales Tax auditor asking for notification for our Job Work is Exempted under Service Tax or Excise.

Kindly advise which notification or rule to be produce

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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27 March 2021 As per notification 214/86 -CE, job-worker is exempt from payment of excise duty when the principal manufacturer discharge duty liability. For detail understanding, kindly refer the notification.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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27 March 2021 Service Tax:
1. When the job work is amounting to manufacture as per Sec 2(f) of Central excise act, then no service tax would be applicable as said process would be covered in negative list entry.
2. In case, process doesnt amount to manufacture but appropriate duty of excise paid by principal manufacturer of final goods, then intermediate products processed by the job-worker would be exempt from service tax as per entry no 30 of notification 30/2012-ST. If the principal manufacturer is not liable to pay any duty then the exemption under entry 30 will not be available and service tax would be applicable & job worker needs to charge service tax.

Central Excise:

As per notification 214/86 -CE, job-worker is exempt from payment of excise duty when the principal manufacturer discharge duty liability. For detail understanding, kindly refer the notification.

MAHESHA R

MAHESHA R (Querist)
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02 April 2021 Dear Sir

Thank You for your explanation and support

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