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2021 (10) TMI 626 - GST
Classification of services - Job Work - rendering of premium CED Coating, Powder Coating and metal finishing coating services - to be treated as a Service as per Schedule II- Point No. 3 or not - N/N. 20/2019 Central Tax (Rate) New Delhi, 30th September, 2019 - GST Rate on Job work is reduced to 6% from 9% is applicable to the firm or not - HELD THAT:- Since no new product comes into existence after the process conducted by the applicant on the goods supplied by its principals, therefore the process undertaken will come under the purview of jobwork as defined under Section 2 (68) of the GST Act, 2017. Thus, the applicant is only a job worker and as a job worker, carries out processes on goods supplied by its principals.
The services provided by the applicant does not fall under (i) (ia), (ib), (ic) of the notification. The impugned Services supplied by the applicant are in the nature of jobwork. Further the said services do not fall under entries at items (i), (ia), (ib) and (ic) above. Therefore the subject supply of services will be covered by the residuary entry at item (id) of the said notification, namely, Services by way of job work other than (i), (ia), (ib) and (ic).
Hon’ble Supreme court in the case of Maruti Suzuki Limited Vs. CCE, New Delhi, [2015 (3) TMI 784 - SUPREME COURT] has also held that there is a distinction between processing and manufacture and that Electro Deposition (ED) Coating of anti-rust treatment to increase shell life of various component is merely a processing activity and not a complete manufacturing activity.
The activity of the Applicant fits the definition of Job work under the present law. Further in terms of the Apex court’s ruling also, activity of coating is only a process undertaken on goods. Therefore the activity undertaken by the applicant is covered under the definition of Job work’ - the impugned services supplied by the applicant are in the nature of job work services, covered under Entry at item (id) under heading 9988 of N/N. 11/2017-Central Tax Rate dated 28.06.2017 as amended.
Whether Notification No.20/2019-Central Tax (Rate) New Delhi, 30’11 September, 2019 - where GST Rate on Job work is reduced to 6% from 9% is applicable to the firm? - HELD THAT:- The service supplied by the applicant is in the form of job-work service and is covered by Entry at item (id) under heading 9988 of N/N. 20/2019-Central Tax (Rate) dt. 30.09.2019. Hence the subject notification is applicable to their case.