Service tax on job work to job work, Service Tax

[Gangadhar Haldikar]

As per entry 30 of 25/2012, "Carrying out an intermediate production process as job work in relation to any goods excluding alcoholic liquors for human consumption, on which appropriate duty is payable by the principal manufacturer." is exempt.

Suppose the principal manufacturer gives job work to job worker A, who in turn, gives it to job worker "B". Now service in the hands of first level job worker is undoubtedly exempted. But is the service exempted in the hands of second level job worker "B" also? Because it is in relation to goods on which duty is payable by principal manufacturer, though the PM is not the direct customer of the second level job worked. The entry does not require it either.

Plain reading of the entry suggests that exemption should be available.

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