Whether the case covers under mega exemption not. 25/2012

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 October 2013 Dear Experts,

Need your professional opinion in this case-

One of our clients is engaged in doing the jobwork for the garment industry (at present an 100% EOU). The jobwork includes certain type of design work, embroidery work, adda work, hand work etc on the stiched garments received from the company. The client is a proprietor and employing 15-20 number of workers for getting the jobwork done.

My query is that whether the work done by him could be covered in the Exempted services as per Not. 25/2012 dated 20/06/2012 in point no 30 (c) which specifically says that

"any goods on which appropriate duty is payable by the principal manufacturer"

Also please guide if any other registration he needs to take.

Querist : Anonymous

Querist : Anonymous (Querist)

11 October 2013 Dear Experts, please reply. Your early response is appreciated.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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03 August 2025 Let’s break down your query regarding whether the jobwork done by your client falls under the Mega Exemption Notification 25/2012 dated 20/06/2012, specifically point no. 30(c), and what registrations may be needed.

Facts Recap:
Client: Proprietor doing jobwork for garment industry (100% EOU)

Jobwork includes: design work, embroidery, adda work, handwork on stitched garments

Client employs 15-20 workers

Query: Does this jobwork qualify for exemption under Notification 25/2012, Point 30(c)?

Also, any other registrations needed?

1. About Notification 25/2012 (Mega Exemption):
This notification grants service tax exemption on certain services.

Point 30(c) states exemption for job work services on any goods on which appropriate duty is payable by the principal manufacturer.

The key words here: “goods on which appropriate duty is payable by the principal manufacturer.”

2. Does the Client's Jobwork fall under this exemption?
Since your client is doing jobwork on stitched garments received from the principal manufacturer (the company), and the principal manufacturer is liable to pay excise/customs duty on such garments, this generally qualifies for exemption.

The exemption applies because the principal manufacturer (the company sending garments for jobwork) pays duty, and the jobwork service is performed on these goods.

Also, garments fall under excisable goods when manufactured in India.

Hence, the jobwork services like embroidery, design, handwork on these garments should be covered under this exemption.

3. Regarding 100% EOU (Export Oriented Unit) Status:
Since the client is an EOU, often such units avail benefits/exemptions under various schemes.

The exemption in Notification 25/2012 also covers EOUs under the jobwork exemption, provided the above conditions are met.

4. Registrations:
The client should be registered under service tax if turnover exceeds the threshold (Rs. 10 lakhs at that time).

For EOUs, generally registration under service tax is still required.

With GST replacing service tax post July 2017, the client would need to obtain GST registration if turnover exceeds the GST threshold.

Since the client is providing jobwork services, GST registration is advisable, especially if dealing with multiple clients or interstate services.

Summary:
Point Conclusion
Exemption under Notification 25/2012, Point 30(c) Yes, jobwork on garments liable to duty by principal manufacturer is exempted.
Does it cover design, embroidery, handwork? Yes, as part of jobwork on excisable goods.
Registration needed? Yes, service tax (pre-GST) and/or GST registration based on turnover.

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