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Scope of Job Work and Manpower supply services - Applicability of service tax on the services received by apparel exporters in relation to fabrication of garments

Service Tax - 190/9/2015 - Dated:- 15-12-2015 - Circular No.190/9/2015-Service Tax F.No.354/153/2014-TRU Government of India Ministry of Finance Department of Revenue (Tax Research Unit) Dated- 15th December, 2015 To, Principal Chief Commissioners of Customs and Central Excise(All) Principal Chief Commissioners of Central Excise & Service Tax (All) Principal Director Generals of Goods and Service Tax/System/CEI Director General of Audit/Tax Payer Services, Principal Commissioners/ Commission .....

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payable on services received by the apparel exporters from third party for job work. Apparently field formations are taking a view that the services received by apparel exporters is of manpower supply, which neither falls under the negative list nor is specifically exempt. However, trade is of the view that the services received by them is of job work involving a process amounting to manufacture or production of goods, and thus would fall under negative list [section 66D (f)] and hence would not .....

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ient. The value of service has a direct correlation to manpower deployed, i.e., manpower deployed multiplied by the rate. In other words, manpower supplier will charge for supply of manpower even if manpower remains idle. 2.1 On the other hand, the essential characteristics of job work service are that service provider is assigned a job e.g. fabrication/stitching, labeling etc. of garments in case of apparel. Service provider is accountable for the job he undertakes. It is for the service provid .....

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hich would vary from case to case. The terms of agreement and scope of activity undertaken by the service provider would determine the nature of service being provided. A typical agreement that has been forwarded by the Apparel Export Promotion Council in respect of outsourced services contains following terms and condition,- a. The contractor (service provider) is engaged for undertaking specific jobs. b. The contractor is at liberty to decide the number of workers which are required for undert .....

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