Service tax on in-house job work contract payment

I am the job work contractor and i received a job work contract in a manufacturing unit. I received Rs.2.50 per K.G. production and for that 10 workers are done the work on behalf of me at the premises of the contractee. All workers are on my pay roll here when i issued my monthly invoice to the contractee, here service tax are applicable to me.

Replies (4)

Dear Bhavin Shah,

If the production as mentioned by you amounts to manufacture as per Excise on which excise duty is payable, then there is no Service Tax Liability. If not, I feel the said scenario would attract Service Tax under Business Auxiliary Service.

Thanks,

Ganesh

The actual job process would be important to determine whether the same is manufacture or deemed manufacture. Once it amounts to manufacture there wouldbe no liability for sure whether the same is leviable to excise duty or not.

If not manufacture the exemption 14/2005  exempts certain processes in relation to printing, agriculture and textiles.

On the face of it, Service Tax is payable, as the job worker is not producing excisable goods. If however, the principal manufacturer is using the processed goods for manufacture of excisable goods, exemption under Notification 8/2005-ST is available.

Dear Sir,

 

We are manufcture of electrial panels excisable goods.

We are getting inhouse jobwork like wiring of finished goods. and the job worker providing job work bill on pices work basis.

Will it come under service tax  RCM ?

please reply with rules and notification.

Murthy

 

 

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