Home Forum Service Tax Month 2 2010 2010 (2) This
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Applicability of Service tax on Job Work - Liability of Sub - Contractors - Service TaxExtract A ltd co gives order to a small contractor M/s XYZ for "manufacture and supply of precast RCC Louvers and Fins " (as per spceification given).The contractor (m/S xyz )does not manuacture and supply above precast RCC louvers and fins in normal routine day to day activity.It is only when such order is recd. they mfg. and supply. The raw materials are fully purchased by m/s XYZ. M/s xyz has to manufacture RCC louvers and fins in his own premises and transport it to ltd. company.M/s XYZ fully sublets the labour portion work to 3 small sub-contractors.- A ,B C Query:- 1)whether M/s XYZ can be called contractors doing manufacturing (on job work basis ) or they can be called pure manufacturers and suppliers?(as they mfg. supply precast louvers fins) 2)Whether ser.tax applies on job work if product mfgd. is excisable and no cenvat challans are prepared when raw materials are issued by m/s XYZ to 3 sub contractors? 3)what happens if product mfgd. is not excisable and raw materials are issued by m/s XYZ to 3 sub contractors? 4)whether sub-contractors are liable to service tax -if final product is excisable and --if final product is not excisable?
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