Applicability of excise on job work

Central Excise duty is on the manufacturer. Job worker is the manufacturer in this case (if the process of job work amounts to manufacture). Liability of duty payment is on him. It has nothing to do with your turnover- the job worker has to see his turnover, when that exceeds 1.5 crore, he may be liable to pay duty.

Further, if the job work does not amount to manufacturer, service tax under business auxiliary service is attarcted.

Hey Rajesh!

Thanks a ton for the clarification!

However, I have a small doubt. What would be the base of the jobworker's turnover? The jobwork price only or the price of the goods+the job work price?

It will be cost plus job charges value.

Further, your job worker may be doing job work for other suppliers also, he has to calculate his turnover based on job work done by him for all parties.

If service tax is payable, it will be on job charges only.

Dear Sir,

We have service receiver and pay service tax on GTA, BAS,Rent and Royalty etc. We are also doing job work and raise Job work Invoice. Can s.tax liability arise on this job work invoice. Thanks

It may if the job work done doesnt amount to manufacture and and the job work is not done under Cenvat rule or notification 214/86.

Dear Sir,

Which type of job work is not done under cenvat rule or notification 214/86.

Thanks

There may be situation that the person who is sending you raw material for job work is not paying central excise duty. In that case, job worker has to take care of central excise duty/service tax.

We are Manufacturer and also doing Job Work for other. We are paying Excise Duty / Service Tax as the case may be.

Our  query is that when we are getting  material for Job Work under Rule 4(5) a , there is exemption under Service Tax  & Excise Duty Liability is with the sender of goods.

In such cases of  Job Work,  whether proportionate CENVAT CREDIT IS TO BE REVERSED ?

No duty is required to be reversed. Look at one of the opinion given by our law firm some time back. I think it will be useful to you.

https://www.hotfrog.in/Companies/RAJESH-KUMAR-ASSOCIATES/FullPressRelease.aspx?id=3874

Thanks for this valuable information.

Dear Rajesh Kumar,

Thanks a lot

Regards

Suren

Dear Rajesh Sir

Is it required to registered in central excise if a job worker needs to do jobwork for a registered manufacturer?Please advice urgently

No. Job worker is not required to be registered.

Dear Sir

Is there any notification/rule or circular, where it is defined clearly. Please advice urgently.