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Job Work under gst, Goods and Services Tax - GST |
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Job Work under gst |
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Sir. Kindly clarrify .My client Mr.A is getting job work from jewellery shop for making jewellery ornaments. Mr.A receives the Raw Gold (24carat) and then he distributes the same to various job workers under him and make the finished product and Mr.A supplies jewellery to the shop. kindly clarrify the GST rate apeplicable to the above work 1. when Mr.A does not carry on any process at his end, he distributes the job received to various other job workers 2. When Mr.A converts the raw gold 24 carat to 22 carat by adding copper and then distributed the job work to other job workers Posts / Replies Showing Replies 1 to 20 of 20 Records Page: 1
Dear Sh. Vignesh Ji, The following decision of AAR Gujarat can help you to arrive at correct decision:- 2021 (1) TMI 374 - AUTHORITY FOR ADVANCE RULING, GUJARAT - IN RE : UDAY LAXMAN JADHAV
Guru ji Sir. Thank u for clarifying, Answers arrived after reading the case. 1. He will not be a job worker as no process/activity of manufacture carried on 2. He will be considered as Job worker as Some Process/Conversion of 24ct raw gold to 22ct Gold for making Jewellery been carried on and which has different GST HSN Code too. is this correct Guruji?
Dear Sh.Vignesh Ji, Yes. You are 100% correct. You are well aware about the aspect of doing job work for registered person and unregistered person. No need to explain further.
With due respect, I beg to differ. With the understanding that jewellery shop is a registered person who has given job-work (i.e. making jewellery from raw gold (24 Carat)) to Mr. A in both the described circumstances, Mr. A is job-worker in both scenarios . For first scenario, it is immaterial that Mr. A does not carry actual job-work by himself but get it done through his sub-contractors. These are ex facie views of mine and the same should not be construed as professional advice / suggestion.
How does Mr.A charge the jewellery shop in both these scenarios?
Sh.Padmanathan Kollengode Ji, You have echoed my thoughts. I was keeping mum with an intent not to hurt feelings of others. I further add that terms, 'sub-contractor' and 'job-worker' cannot be equated whether it is GST era or pre-GST era. Principal can never be job-worker. Principal is a manufacturer in this scenario. Job-worker can also be called manufacturer, if duty/tax is paid by him (job-worker) and invoice is issued by him. If job-worked goods are sent back to the principal, then the principal will be a manufacturer of complete and finished goods.
I have noted comments of Ld. Shri Kasturi Sethi Ji. I completely stand with my views shared in above post at serial No. 4 and with due respect, I see no reason to change them.
Having said that, I and Shri Kasturi Sir differ on the topic 'manufacturing services' from more than one angle. Example: Please refer to discussion under Issue-ID: 117803 with the subject-line as GST Rate for Job Work. I see all this as part of healthy discussion and there is no occasion or reason for anyone hurting my feeling etc. just because we do not see an eye to eye on some legal issues. And I always respect contrary views even when I completely disagree with them. If everyone agrees with everyone, there will be no need of 'discussion forum'.
I am also of the view that the nature of supply by A to jeweller shop is a job work, which he chooses to get it done by way of a subcontract. Sub-contract is a way of getting it done but the responsibility to the jeweller is of A.
Sh.Amit Agrawal Ji, "If everyone agrees with everyone, there will be no need of 'discussion forum" Your above version is undisputed. Difference of opinion leads to innovative ideas. (Already expressed in this forum).
The reason behind my question in previous post is due to the fact that in different places, different practices are followed. I have that in some cases in Kerala, the (purported) gold worker actually purchases bullion and then sub-contracts the work to multiple job workers and finally sells the finished jewellery to jewellery shop. In such a case, he becomes principal as he owns the bullion. To my understanding, this practice is followed here considering the wastage etc which comes during the work.
I agree with you. However, I add as under :- Yes, the wastage is one of the factors. Here 'principal' means owner. Owner will remain owner. He cannot be termed as job worker by any amount of logic or legal force whether pre-GST era or post GST regime. Job-worker always does the job (work) for and on behalf of an other person (principal). The ' practice' factor cannot be determining factor. The practice may be wrong or right de jure.
Dear Experts, I feel absence of sportsman spirit in true sense in this forum. I have not jumped at conclusion.
@ Shri Padmanathan Ji, W.r.t. your post at serial No. 11 above, as you are aware, my views - shared above - is with regards to facts quoted by the Querist read with my understanding thereto at explained in my post at serial No. 4: Facts as per Query: "Mr.A is getting job work from jewellery shop for making jewellery ornaments. Mr.A receives the Raw Gold (24 carat) and then he distributes the same to various job workers under him and make the finished product and Mr.A supplies jewellery to the shop. .............." My understanding thereto as explained in post at serial no. 4 above: "With the understanding that jewellery shop is a registered person who has given job-work (i.e. making jewellery from raw gold (24 Carat)) to Mr. A in both the described circumstances, ......". With above background and considering Section 2 (68), I hold my view that Mr. A as 'job-worker' (and jewellery shop is 'principal / owner' of goods (i.e. raw gold)) in both scenarios as described in the query. And for first scenario, it is immaterial that Mr. A does not carry actual job-work by himself but get it done through his sub-contractors. These are ex facie views of mine and the same should not be construed as professional advice / suggestion.
& my views are beautifully expounded by Ms. Shilpi Ji in her post at serial No. 9 above.
Dear Sir, Do you find any difference between the terms, 'sub-contractor' and 'job-worker' ? Pl. opine and oblige me for enrichment of my knowledge.
@ Shri Kasturi Sethi Ji, I do not find any link the context of your posts with my views what-so-ever for situations under discussion here. Unless and until you properly explain how my views are contrary to legal provisions under discussion here & rules made there, I cannot elaborate my given views any further. In addition & with due respect, I cannot answer your hypothetical & generic questions unless and until I know context of these questions & its relevance (if any) to the legal issues under discussion.
Learned Amit Ji, I completely agree with your view and views of Shilpi Ma'am with respect to the reply in the context of the query posted here. The term "undertaken" has a wider import in my opinion. Hence, the job worker need not personally do the job work and he can choose to get it done by someone else as well. He shall remain to be job worker as long as he remains responsible (for the quality for work, specification etc..) for the job work undertaken by him to the principal. PS: I am not changing my views from my previous post. The only intention behind my previous post was caution the querist about the fact that jewellery works (apart from actual job work which they do) also purchase gold bullion, convert it into jewellery and supply it to jewellery, since I practically have seen such transactions also.
This is especially in the context that the querist has mentioned and i quote: Mr.A receives the Raw Gold (24 carat) and then he distributes the same to various job workers under him and make the finished product and Mr.A supplies jewellery to the shop. I am only suggesting the querist to delve into the fact as to: A: whether such "receipt of raw gold" is for consideration (ie. it will amount to purchase of gold) and "supplies jewellery to the shop" (again, if it for consideration, it will be sale) i.e. whether the whole transaction done by Mr.A being a purchase and sale (and actual jobwork done by other job workers and Mr.A will be the principal) OR B: whether Mr.A received only charges for jobwork (in which case, the query is answered by Amit Ji and Shilpi Ma'am)
Thank you, Shri Padnanathan Ji, for your elaboration in your post at Serial No. 18 above. You can have beautifully explained the definition of job-work & job-worker & the context behind use of word 'sub-contractor' in my posts earlier. Page: 1 |
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