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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 ..... Job work & Service Tax X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 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 KASTURI 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 servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. Reply 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 manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red 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 manufactured 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 mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial without payment of duty from X. For this purpose Y company has to follw the procedure mandated by Notification No. 214/86. Situation: -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. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sh. Rajagopalan Ranganathan, Sir. X X X X Extracts X X X X X X X X Extracts X X X X
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