Jewellery- Excise or Service Tax - Gold produced on job work – not subject to Service Tax
Since the Board had clarified about the excisability of branded Jewellery, the field officers have found a new method of bringing gold within their control via Service Tax. It has been brought to the notice of the Board that certain field formations have interpreted that service tax is leviable on certain processing activities undertaken by job-workers in relation to manufacture of Gem and Jewellery sector, for or on behalf of the client, even though such activities does amount to ‘manufacture’ under Central Excise Law. So the Board clarifies that, Processes outsourced in gem and jewellery sector which amount to ‘manufacture’ within the scope of section 2(f) of the Central Excise Act, 1944 would not be liable to service tax. Production of goods on behalf of the client is leviable to service tax under ‘business auxiliary service’ only if such production activity does not amount to manufacture. –
F.No. -TRUdated 12.5.2005