In real business scenario, it may not be possible for an industry to carry all processes leading to manufacture of final product within its own premises. In such an eventuality the manufacturing unit will have to get the work done i.e. processing of the raw materials or intermediate product from outside. The processes performed outside are called Job Work.
In the context of the Central Excise law, Job Work has been defined under Rule 2(n) of the Cenvat Credit Rules, 2004 to mean processing or working upon raw material or semi-finished goods supplied to the job worker, so as to complete a part or whole of the process resulting in the manufacture or finishing of an article or any operation which is essential for aforesaid process.
Looking at the above definition we can say that Job Work or Sub Contracting is an activity of taking an order to manufacture or process goods as per the prescription of the client by utilizing material supplied by the client or purchased on behalf of the client and charging him for the services provided as Job Work or Sub Contract.
Job Work or Sub contracting is also a part of trading business, maybe not as large as in the case of manufacturing. In our Day to day life we might have experienced this. E.g. we visit a suit length showroom and liked a piece of cloth for the suit. The retailer takes the measurement for Stitching and asks us to get back for collecting the ready suit after few days. What does he do in the meantime? He gives the suit length to a specialist tailor and receives the ready suit after stitching and finishing, this, too, is job work or sub-contract.
Many manufacturing industries fall under the purview of Excise however few are still exempted from Excise like in the case of Garment Manufacturing.
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