service tax on job work

If the goods on which job work is done is used in manufacture of excisable goods, then you are not liable to service tax

Dear Aditi,

The job work activity is covered under Business Auxiliary Services head. A unit is said to be a job worker only if the process done by him does not amount to manufacture, that is to say that the goods processed by a job worker should not be final a should be subject to further manufacturing processes at the end of pricipal manufacturer.

Therefore you are liable to pay and charge service tax as you are just a job worker and your product is not a final product in it self.

Regards

9811617186

Kindly refer to the notification No 8/2005 ST dated 1/3/2005.  Activity of a Job worker may or may not amount to maunfacture. It is not proper to say that if a activity is a manufacure then the person carrying on such activity is not a job worker. If the job worker manufactures excisable goods and the same are used as input by his client, then the job worker has two options. Either he can pay excise duty and enable the client to claim credit of the same or the job worker can claim the benefit of CE notification 214/86 - CE.

Therefore, if the job worker has performed any activity on the goods supplied by the client and the same goods are used by the client for manufacture of excisable goods, ST is not applicable.

Everyone.. lets have futher deep analysis of jo work case.

There is an indian designer who is designing the embodiery samples- for US based company. They only prepare the designs and sent it to US- In reverse the USA based company provides the manufacturing orders to third party ( Based in India only). What will be the Servic Tax implication in all the two cases- To Designer and to Manufacturer. Business Details- Embrodiery Studio- Preparing deigns for the Clothes and Traditional Dresses- ( Any one require further details can mail me on bhavikdavda @ in.com)- Kindly mention Export of Services details whenever avilable. Thanks

HI Bhavik,

Well what you are saying is purely a export transaction. Any thing you manufacture in India and export it to US would be Export. As we no Exoprt of goods and services are exempt from Duty/Tax. 

For more details you may contact us at 09811617186

regards

Thanks to all !

Sir,

We are an engineering doing job work of end products for boilers for which the goods are moved from our factory by paying excise duty by ourself or by our client for whom we are doing job work. For this conversion bills, we are not paying any service tax, since the end products are covered under excise duty. My query is, on such job works, we are giving sub contract to some auxillary works. Kindly inform whether such sub contractor is exempted from service tax, since the final end products are excisable.