DEAR FRIENDS,
I AM WORKING IN MANUFATURERS CO, WE USE TO TAKE CENVAT CREDITE ON INPUT SERVICESS,& RAW MATERIALS ALSO, WE ARE DOING BOTH ACTIVITIES, i.e. MANUFATURING AS WEL AS JOB WORK PROCESSING WORK UNDER NOT. NO 8/2005 OF SERVICE TAX ACT & RISE THE BILL TO PRINCIPAL SUPPLYERS AS A JOB WORK CHARGES,UNDER NIL SERVICE TAX. IS THIS A CORRECT PROSEGUIR ?
If you have common input services/inputs for both own production and job production Rule 6(3) of CCR is applicable . You have to proportionately reverse credit attributable to job work as the same is exempted under service tax.
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