Clarification regarding job work

Regarding supply of labour for manufacturing activities at an Industry
is it necessary that the supplier of labourers / contractor should himself be a manufacturer to claim exemption from service tax.

Kindly reply to this query in all our academic interest.

 

Thanks

Replies (5)

There is no way you can be exempted from service tax for supply of labours, unless you are a person other than a business entity or you being a business identity has a turnover of less than Rs. 10 lakhs in the previous Financial Year.

If the activity performed by the job worker results in "manufacture" than I think ST is not leviable...excise duty will be enforceable...???  ur comments pls....

supply of labour - the line itself declares that the service provider has "sent the workers to the serevice receipents premises for any work assigned or to be assigned by the service receipent", so either it is manufacture or not, is not the prob of supplier of labour , as the activity is done at premises of service receipent, so he is fully liable for the same. 

supplier of labour comes under ST levy under "manpower recruitment services"

 

We are a Private Limited Company manufacturing note books mainly to schools.

Problems regarding Service tax

a)   Three groups of people are working with us where we are paying them on piece rate basis for job/ lamination. The total outlay is Rs. 2.5 lakhs to Rs. 3.00 lakhs /months.

At present, we are deducting TDS on the payment made to them.

 Whether we are coming under the preview of Service Tax or not?

And if yes what amount we have to pay?

Is there any way, we can avoid it legally?

b)    we are giving board for printing-

  Option-I

  We do not provide anything, they raise the bill under 80/20 i.e. they   deduct 20% on labour aand charge 4% on 80%.

  Option-II

  We provide ink and plate to them along with board. They will raise the bill only for labour charges.

         What should be the treatment under above 2 cases?

 

 

We are a Private Limited Company manufacturing note books mainly to schools.

Problems regarding Service tax

a)   Three groups of people are working with us where we are paying them on piece rate basis for job/ lamination. The total outlay is Rs. 2.5 lakhs to Rs. 3.00 lakhs /months.

At present, we are deducting TDS on the payment made to them.

 Whether we are coming under the preview of Service Tax or not?

And if yes what amount we have to pay?

Is there any way, we can avoid it legally?

b)    we are giving board for printing-

  Option-I

  We do not provide anything, they raise the bill under 80/20 i.e. they   deduct 20% on labour aand charge 4% on 80%.

  Option-II

  We provide ink and plate to them along with board. They will raise the bill only for labour charges.

         What should be the treatment under above 2 cases?

 

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