Vat is applicable on Job work?
This query is : Resolved
09 June 2010
Dear Sir,
we were doing job work on steel structures we were taking input credit in central excise and paying excise on despatch of material, now is there any VAT applicable on excise invoice? we were writing invoice only excise and edcess, hsecess in VAT column we were showing blank, after all of the work is complete we were doing fabrication bill for the sent material. For Ex: we had received a order for 100mt material. Job work charges for the above is Rs.10000/- we were paying excise landing price + Job work charges. After completing the work were issuing fabrication bill for 100mt x 10,000 = 10,00,000/- this amount was shown in VAT return as exempted sales. We were not charging any VAT in job work. Is this process is correct or not? Kindly give me your suggestion.
we were doing job work on steel structures we were taking input credit in central excise and paying excise on despatch of material, now is there any VAT applicable on excise invoice? we were writing invoice only excise and edcess, hsecess in VAT column we were showing blank, after all of the work is complete we were doing fabrication bill for the sent material. For Ex: we had received a order for 100mt material. Job work charges for the above is Rs.10000/- we were paying excise landing price + Job work charges. After completing the work were issuing fabrication bill for 100mt x 10,000 = 10,00,000/- this amount was shown in VAT return as exempted sales. We were not charging any VAT in job work. Is this process is correct or not? Kindly give me your suggestion.
10 June 2010
is there any material involved in your jobwork done? if it's so ofcourse sale tax would be charged as WCT.
12 September 2011
please refer to http://www.salestaxindia.com/htms/articles1.htm
i hope it will answer some of your queries....
i hope it will answer some of your queries....
02 August 2025
Regarding VAT applicability on job work for steel structures:
1. **Job Work and VAT:**
Generally, in most states, **job work services** are **liable to VAT** if the job work results in the transfer of goods or if the job worker is a registered dealer. The value of job work services is taxable under VAT.
2. **Input Credit & Excise:**
Since you are paying excise duty on dispatch and availing input credit under central excise, VAT is a separate levy and must be considered independently.
3. **Invoicing and VAT on Job Work:**
If you are charging job work charges (e.g., Rs. 10,000) for the fabrication service, VAT should be charged on this amount unless the specific job work is exempted under your state’s VAT laws.
4. **Exempted Sales Reporting:**
Showing the entire fabrication bill as exempted sales in the VAT return may not be correct unless there is an explicit exemption for such job work services in your state VAT Act.
5. **What should be done:**
* The job work charges should be invoiced separately and VAT should be charged at the applicable rate.
* The excise duty and cess are separate and should be clearly shown on the invoice but do not exempt you from VAT on job work charges.
* Verify the VAT rate applicable to job work services under your state VAT laws (often 5%, 12.5%, or 14.5% depending on the state).
* Consult your local VAT regulations or a tax consultant for state-specific provisions.
**Summary:**
Your process of not charging VAT on job work and showing the entire fabrication amount as exempted sales may not be fully correct unless your state explicitly exempts job work services from VAT. VAT should generally be charged on job work charges.
1. **Job Work and VAT:**
Generally, in most states, **job work services** are **liable to VAT** if the job work results in the transfer of goods or if the job worker is a registered dealer. The value of job work services is taxable under VAT.
2. **Input Credit & Excise:**
Since you are paying excise duty on dispatch and availing input credit under central excise, VAT is a separate levy and must be considered independently.
3. **Invoicing and VAT on Job Work:**
If you are charging job work charges (e.g., Rs. 10,000) for the fabrication service, VAT should be charged on this amount unless the specific job work is exempted under your state’s VAT laws.
4. **Exempted Sales Reporting:**
Showing the entire fabrication bill as exempted sales in the VAT return may not be correct unless there is an explicit exemption for such job work services in your state VAT Act.
5. **What should be done:**
* The job work charges should be invoiced separately and VAT should be charged at the applicable rate.
* The excise duty and cess are separate and should be clearly shown on the invoice but do not exempt you from VAT on job work charges.
* Verify the VAT rate applicable to job work services under your state VAT laws (often 5%, 12.5%, or 14.5% depending on the state).
* Consult your local VAT regulations or a tax consultant for state-specific provisions.
**Summary:**
Your process of not charging VAT on job work and showing the entire fabrication amount as exempted sales may not be fully correct unless your state explicitly exempts job work services from VAT. VAT should generally be charged on job work charges.
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