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2019 (10) TMI 571 - AAR - GSTClassification of services - job work or a composite supply of service and goods - Valuation - inclusion of value of free of cost supplies by the principal in the value of supply by the job worker - HELD THAT:- In terms of Section 2(68) of the CGST Act 2017, any treatment or process done on goods belonging to another person is job work and in the instant case the applicant is not just doing something on the critical components. The contract is to supply a manufactured product, some of the parts are supplied free of cost by the recipient of such supply and some other parts are to be procured by the applicant. Both these components are to be assembled together using the labour of the applicant to form the final product. No treatment or process is done on the components supplied by the applicant and in fact they are used as a part in the manufacture of a different component. The nature of supply done by the applicant is one composite supply consisting of two supplies i.e one relating to the manufacturing service on the physical inputs (goods) owned by others (Service Accounting Code 9988) and the other relating to supply of non-critical components, with the former being the principal supply. Hence the entire transaction is to be treated as the supply of manufacturing service on the physical inputs (goods) owned by others (Service Accounting Code 9988) and is taxable at the rate applicable to the same at 18%. The value of the goods provided by WIPL would not form the part of the value of the supply and must be excluded while valuing the supply. The value of the goods provided by WIPL would not form the part of the value of the supply and must be excluded while valuing the supply.
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