Jobwork under Service Tax

Dear All

Assessee  receives material from manufacturing co's under challan no s 4  ( ie Job work ) , then by using their own  paint / chemicals they perform painting work on the material & return to manufacturer with in 180 days.  

In this case whether assessee is liable to to Service tax ? if yes under which service ( Business Auxiliary service or which )

And in case Paint / chemical is provided by manufacturer then what is the effect?

Replies (4)
Originally posted by : NISHANT VIJAY JADHAV

Dear All

Assessee  receives material from manufacturing co's under challan no s 4  ( ie Job work ) , then by using their own  paint / chemicals they perform painting work on the material & return to manufacturer with in 180 days.  

In this case whether assessee is liable to to Service tax ? if yes under which service ( Business Auxiliary service or which )

And in case Paint / chemical is provided by manufacturer then what is the effect?

if the final products are subject to excise duty ( in your case it has to be) then no service tax 

paints etc are consumable for job charges. 

Dear nishant,

If the activity done by the job worker amounts to manufacture then no service tax is applicable. only excise duty is payable that too either by the pricipal manufacturer or the job worker, no matter whether material is supplied by principal manufactuere or not . 

But if the process does not amount to manufacture then service tax needs to be paid as a job worker covered under Business Auxiliarry services.

Regards

Jeevesh Mehta

Ph: 09811617186

As long as the principal manufacturer is discharging the duty of excise on the finished product the same is exempted under not 8/2005. The challan I presume is Challan issued under Rule 4 (5)(a)/ 214/86.

If not then there could be a liability under BAS- production/ processing of goods for or on behalf of another.

Dear Sir,

I am running an iron foundry. I do job work for my customers. They supply iron scrap to me and I melt the iron and give them shape according to their moulds.

I recieve iron scrap and I make cast iron castings rough and un-machined.

I am doing job work with excise From F-57 with annual job work amounting to Rs. 50L.

Whether I am liable to pay service tax or not ??

Pl confirm and if there is any ruling / notification , kindly give the same.

I shall be greatful to you.

Thanks.

 

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