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SERVICE TAX NOT BE APPLIED ON JOB WORK MATERAIL BEING RECEIVE ON 57f4, Service Tax

Issue Id: - 115384
Dated: 3-9-2019
By:- ace nitriders
SERVICE TAX NOT BE APPLIED ON JOB WORK MATERAIL BEING RECEIVE ON 57f4

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Dear Sir,

on which notification or rule it is cleared that job worker should not add service tax on materail being issued on 57F4 for processing on returnable basis

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1 Dated: 3-9-2019
By:- KASTURI SETHI

You cannot intermingle Central Excise duty and Service Tax. Both are entirely different concepts. See Rule 10 A of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. Job work was exempted because its cost was included/added in the manufacture of dutiable final product (notification no.214/86-CE as amended from time to time read with Rule 57 F(4) of Central Excise Rules, 1944. If job-work (process) amounts to manufacture, no Service Tax is leviable. Either Central Excise duty or Service Tax is/was to be charged and not both.If the process of job-work does not amount to manufacture, it will be treated as service and it falls in the category of Business Auxiliary Service because job-worker works for and on behalf of the principal. Cost of job-work + profit will be added to the transaction value of final product.

[(19) “business auxiliary service” means any service in relation to, -

(i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or

(ii) promotion or marketing of service provided by the client; or

[ * * * * ]

(iii) any customer care service provided on behalf of the client; or

(iv) procurement of goods or services, which are inputs for the client; or

  [Explanation. - For the removal of doubts, it is hereby declared that for the purposes of this sub-clause, “inputs” means all goods or services intended for use by the client;]

[(v) production or processing of goods for, or on behalf of, the client;]

(vi) provision of service on behalf of the client; or

(vii) a service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management or supervision,

and includes services as a commission agent, [but does not include any activity that amounts to manufacture of excisable goods].

Kindly elaborate your query in order to enable the experts to give comprehensive reply.


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