Hello friends., i have been searching for this issue on various sites, but could not find or get any reasonable or rather valid reason..
I want to know, what is the BASIC difference between JOB WORK & WORKS CONTRACT services? I know the similarity betn both, i.e., in both of them, there is provision of service, by using material of some or the other sort.
A. Someone said, generally, job worker provides service using the material and in works contract its provision with service alongwith materials or product.. So, does that mean, if job worker, in course of providing services, transfers any material, that transaction or service turns out to be the WORKS CONTRACT? Dont tell me..
B. Moreover, another reason i got was that in JOB WORK the amount involved is lesser, while the amount in WORKS CONTRACT is higher or the quantom of contract is big.. Even this seem non-reasonable to me.., i mean, two services are categorized differently, on the basis of quantom of the amount..?
C. Another one said, WORKS CONTRACT is undertaken by the company or some group of people.., while JOB WORK is considered by individual, i.e. single person... Yeah., i know, this is most pathetic one.., but cant help, as got such replies from real experts...
And the difference i could arrive, is:
Job Work: Contract is given to job worker, whereby material is supplied by the person giving the contract. So, job worker, provides pure service on such material available.., that means he works on behalf of the manufacturer...
Works Contract: Here, the job worker himself is manufacturer, as he not just provides service but also brings the material on his own. So, he works on his own for providing service...
Still, as i said, what if the Job worker finds that material provided by manufacturer is not sufficient for provision of service at his personal level/capacity, he would request manufacturer to provide additional material or will bring material on his own? and what will be its impact?
Dear, First let me Know,
In Which Act/Law You wanna to know the difference.
if You confused in service tax law, then there is no difference as job work also falls under work contract.
Yes, i wanted to know about Service Tax Law..
And are you sure, both services fall under common head, as the practices followed in companies is different..
Anyways, will check out now., thanx..
| Originally posted by : CA Dhiraj Ramchandani | ||
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Yes, i wanted to know about Service Tax Law.. And are you sure, both services fall under common head, as the practices followed in companies is different.. Anyways, will check out now., thanx.. |
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But Boss This the reply from Great VS Datey Sir.
In job work, no material is involved (pure labour) as material is supplied by customer Works contract is composite contract of material plus labout where material is purchased by service provider, used in the work, and then that material gets sold (transferred) to customer when he bills the customer V S Datey
Yes., exactly.., what explaination is given in VS Datey.., i derived that only on personal understanding..., but was not sure., thats why..
| Originally posted by : ram babu b.com | ||
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In Job work - the worker i.e the contractor who undertook the job is not creating anything (entirely) new product. Whereas in a works contract the contractor creates an entirely different product. |
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agreed
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