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TMI BlogJob work & Service TaxX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Experts, I need clarification on one issue. X company is doing job work for Y company, where Y company is paying excise duty on the total material value. Where as X company is not paying any service tax on the job work done. Since Y company is paying excise duty on the total value of the material, is it essential to pay service tax by X company? Kindly clarify Srinivas - Reply By KASTU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RI SETHI - The Reply = Sir, No ST is to be paid as CE duty stands paid. - Reply By Ganeshan Kalyani - The Reply = Sir, You are paying Excise Duty it means the activity carried out by company X is a manufacturing activity and thus service tax is not applicable. Either service tax or excise duty is leviable depend upon the nature of activity/ process carried out by Job worker. Thanks. - Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply By Rajagopalan Ranganathan - The Reply = Sir, Situation: -I If the process undertaken by the job worker, namely company X amounts to manufacture under Section 2 (f) of Central Excise Act, 1944 , then X has to pay duty on the product manufactured by him. The duty amount paid by X can be taken as credit by Y company and an utilize the same for payment of duty on the final product manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actured by Y. If Y company avails Notification No. 214/86-CE dated 25.3.1986 , then Y company can take the credit of duty paid on the raw materials which is transfered to the job worker for further processing and Y company can get back the processed raw material without payment of duty from X. For this purpose Y company has to follw the procedure mandated by Notification No. 214/86. Situatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n: -II If the process undertaken by X company as job worker does not amount to manufacture, then X company has to pay service tax on the gross value charged by X company. This service tax paid by X company can be availed as input service credit by Y company. However, as per Sl. No. 30 (c) of Notification No. 25/2012-ST dated 20.6.2012 (with effect from 1.7.2012) as amended carrying out an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intermediate production process as job work (by X company) in relation to any goods excluding alcoholic liquors for human consumption, on which appropriate duty is payable by the principal manufacturer (Y company). - Reply By KASTURI SETHI - The Reply = Agree with Sh. Rajagopalan Ranganathan, Sir. - Job work & Service Tax - Query Started By: - Srivatsan Krishnamachari Dated:- 30-3-2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Service Tax - Got 4 Replies - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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