JOB WORK OF POWDER COATING, Central Excise

[PARVEEN ARORA]

Sir

Proprietory Concern is running the Powder coating Job work activities from delhi & UP and he doing the job for their client which is situated in Haridwar (Excise exempted Zone) so pl give opinion whether we will cover in EXCISE or SERVICE TAX.

thanks & regard

 

 

Posts / Replies

[CA BALRAM PANDEY]

Dear Arora Ji,

If you are sending goods on job work then you will fall under Central Excise, simultaneously if you are receiving services mentioned under notification 30/2012 dated 20.06.2012 of Service Tax, then you may fall under Service Tax also.

If you state the exact nature of serviced provided to you then i can guide you.

Thanks & Regards

Balram Pandey 

[PARVEEN ARORA]

Dear Panday ji,

Proprietory concern is doing powder coating job work on electrical goods (like on MCB, Tube Lights) , we receive goods in delhi from Companies and after doing powder coating we return it to haridwar, (haridwar is excise exemption zone ) , whether proprietory concern is liable to charge excise or not.

 Thanks and regards

[CA BALRAM PANDEY]

Dear Arora Ji,

From your reply it is clear that:-

1. You are receiving goods for job work.

2. After job work is finished you returned the goods to Manufacturer who had sent it to you.

Hence as per provisions of Central Excise (Job Work) Rules, 2004 it can't be deemed to be manufacture. As, if goods sent for Job work are returned withing 180 days no excise duty is payable either by Manufacturer or Job worker subject to conditions place of removal of those goods are not the premises of job worker. Once the goods are received by Manufacturer in his premises, then only on removal therefrom for a consideration, excise duty liability occurs. If the goods are cleared from premises of Job worker then either manufacturer or Job worker can pay the excise duty.  

In your case, since you are not clearing the goods rather you are returning the goods to seller after job work, no excise duty liability occurs on your shoulders.

Thanks & Regards

[PARVEEN ARORA]

Dear Pandey ji,

Kindly also guide me on service tax liability on this Job work case.

Thanks & regards

 

[Chintamani Bhide]

Mr. Arrora,

Mr. Pandey has already clarified about Excise liability. As regards service tax liability, production or processing of goods on behalf of principal manufacturer (although falling under Business Aux Service) is exempted from Service Tax, provided principal manufacturer pays 'appropriate duty' on the goods so processed or on the goods in which these powder coated goods are used.

Just confirm whether the principal manufacturer sends goods for job-work to you under Rule 4 (5)a of CCR, 2004 OR whether he pays duty on the final product made out of such processed goods.

If powder coating amounts to manufacture, then it will not attract service tax at all !!

regards,

 C.J. Bhide

Consultant, Excise & Service Tax

[cumi cumi]

Please Refer Notification No. 25/2012 dated 20/06/2012 for such exempted from Service tax - appropriated para is reproduc ed below:

30. Carrying out an int ermediate production process as job work in relation to -

(a)  agriculture, printing or textile processing;

(b)  cut and polished diamonds and gemstones; or plain and studded jewellery of gold and other precious metals, falling under Chapter 71 of the Central Excise Tariff Act ,1985 (5 of 1986);

(c)   any goods on which appropriate duty is payable by the principal manufacturer; or

(d)  processes of electroplating, zinc plating, anodizing, heat treatment, powder coating, painting including spray painting or auto black, during the course of manufacture of  parts of  cycles or sewing machines upto an aggregate value of taxable service of the specified processes of  one hundred and fifty lakh rupees in a financial year subject to the condition that such  aggregate value had not exceeded  one hundred and fifty lakh rupees during the preceding financial year;

Thanks & regards,

Soumyaranjan

[raj kumar shukla]

In case, the process undertaken amounts to manufacture. benefit of 214/86 would not be available to job worker as principal is exempted from payment of duty and job worker will have to pay duty.

in case it does not amount to manufacture. service tax will be payable as no appropriate duty is being paid by the principal to claim service tax exemption

[PARVEEN ARORA]

Sir,

please guide me on calculation of service tax also, as on which amount service tax is payable.

whether ,I have to bifurcate the labour or material value otherwise if it not possible to bifurcate, then on which value.

Obliged

[Satheesh Babu]

Dear Sir

We are a Pvt Ltd Company, manufacturing company at chennai running the Powder coating Job work activities receiving job work from local Principle Manufacturer and we are doing the job work includes consumables (Powder Coating) for their client . so pl give opinion whether we should raise invoice with EXCISE or SERVICE TAX.

Satheesh