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Difference between job work and works contract

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Darshan Dodiya

Student CA Final

75 Points Posted on 13 January 2013

Hello sir...

What is the line of difference between Job Work and Works Contract ? For example if X ltd. - A Hotelier gives an order to Y Ltd. - A manufacturer of branded clothes to make T-Shirts for its employees having logo of company i.e. X Ltd. this would amount to Works contract and excise will not be charged. But if for example Z ltd. - a textile manufacturer gives an order to Y ltd. to make some printing works on the clothes manufactured by Z Ltd , this would amount to Job Work and exise will be applicable to subject to conditions of Valuation Rules. So i want to know how to determine whether a particular case will fall under works contract or job work..??

Please reply....

Replies (1)

Arun Kumar Singh

GST Advocate

13166 Points Posted on 13 January 2013

This activity is not a work contract, it is job work. carrying out an intermadiate producation process as job work in relation to printing or textile processing exempt from service tax under mega exemption notification no. 25/2012. It is also exempt from excise duty on school uniforms, uniforms for private security guards, companies, hotels, airlines etc bearing the name or logo of a hotel under circular No. 947/8/20011 dated 21.06.2011.