Home Case Index All Cases GST GST + AAR GST - 2024 (4) TMI AAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (4) TMI 843 - AAR - GSTClassification of services - activity of insulating of bare M.S. Pipes provided by the customers on job work basis by using PU Foam and PE Film/HDPE jackets owned by the applicant - classifiable under clause (iv) of Sr. No. 26 or under Sr. No. 27 of notification No. 11/2017-CT (Rate) dated 28.6.2017 or not - HELD THAT:- The CBIC has already clarified the issue with its Circular No. 126/45/2019-GST dated 22.11.2019. Consequent to insertion of entry 26(id) under heading 9988 of notification No. 11/201 7-CT (Rate), ibid, which prescribes 12% GST for all services by way of job work, doubts were raised that this insertion may lead to a situation rendering the entry at item 26(iv) dealing with 'manufacturing services on physical inputs owned by others' redundant. Tax Research Unit of CBIC vide its aforementioned circular clarified that there is a clear demarcation between entries at items 26(id) & 26(iv); that item (id) covers only job work services as defined u/s 2(68), ibid ie services by way of treatment or processing undertaken by a person on goods belonging to another registered person. What this means is that the process may or may not result in manufacture. Further circular states that Sr. No. 26(iv) specifically excludes services covered under entry (id) & therefore covers only such services which are carried out on physical inputs (goods) which are owned by persons other than those registered under CGST Act. The activity undertaken by the applicant of coating of M.S. pipes falls within SAC code 998873. Thus, even on this ground the averment that the activity would fall within the ambit of SAC code 9989 is ruled out. This was reiterated in the case of COMMISSIONER OF CENTRAL EXCISE, BOLPUR VERSUS M/S RATAN MELTING & WIRE INDUSTRIES [2008 (10) TMI 5 - SUPREME COURT] wherein the Hon'ble SC held that circulars and instructions issued by the Board are no doubt binding in law on the authorities under the respective statutes. Thus, dutifully, following the clarification issued by the circular dated 22.11.2019, issued by CBIC, we find that in respect of services by way of treatment or processing undertaken by the applicant on goods belonging to another registered person, the same would be classified under 26(id) of notification no. 11/2017-CT(Rate), ibid, under the heading 9988. Likewise, for services by way of treatment of processing undertaken by the applicant on physical inputs which are owned by persons other than those registered under CGST Act, would be classified under 26(iv) of notification no. 11/2017-CT(Rate), ibid, under the heading 9988. Thus, the activity of insulating of bare M.S. Pipes provided by the registered customers on job work basis by using PU Foam and PE Film/HDPE jackets owned by the applicant would be classifiable under clause (id) of Sr. No. 26 of notification No. 11/2017-CT (Rate) dated 28.6.2017. Further, it would be classifiable under clause (iv) of Sr. No. 26 of notification No. 11/2017-CT (Rate) dated 28.6.2017 in respect of similar service provided on goods belonging to unregistered persons.
|