GST Rate for Job Work, Goods and Services Tax - GST

[Basha AbdulRazack]

Sir,

Please clarify the current rate of GST for following category of job work

9988 Manufacturing services on physical inputs (goods) owned by others

99889 Other manufacturing services

998898 Other manufacturing services n.e.c.

Thanks & Regards

Abdul Razack

Posts / Replies

[KASTURI SETHI]

CESTAT Banglore has held that electroplating amounting to manufacture. The Department has not accepted this decision and has filed an appeal with the Supreme Court which is still pending decision.Go through this :

(1) Manufacture - Activity of electroplating goods with silver or gold whether amount to manufacture?

(2) Business Auxiliary Service - Activity of electroplating goods with silver or gold on job work basis and supplying same to EOU whether leviable to Service Tax?

(3) Exemption - Goods supplied to EOU after subjecting to electroplating on job work basis whether eligible to exemption under Notification No. 8/2005-S.T.?

The Supreme Court Bench comprising Hon’ble Mr. Justice J. Chelameswar and Hon’ble Mr. Justice S. Abdul Nazeer on 27-2-2017 after condoning the delay admitted the Civil Appeal No. 3835 of 2015 filed by Commissioner of Service Tax, Bangalore against the CESTAT Final Order No. 25247/2013, dated 3-4-2013 as reported in 2014 (33) S.T.R. 56 (Tri.-Bang.) = 2013 (5) TMI 451 - CESTAT BANGALORE (Interplex Electronics India Pvt. Ltd. v. Commissioner). While admitting the appeal, the Supreme Court passed the following order :

“Delay condoned.

Appeal admitted.

List the appeal in normal course.”

The Appellate Tribunal in its impugned order had held that the activity of electroplating of goods with silver or gold on job work basis amounts to manufacture, hence the assessee are not liable to pay Service Tax in view of specific exclusion in the definition of Business Auxiliary Service. Since the goods had been supplied to 100% EOU who is eligible for unconditional exemption under Notification No. 24/2003-C.E., the assessee has a case for eligibility for exemption under Notification No. 8/2005-S.T. even if it is assumed that the process does not amount to manufacture.

[Commissioner v. Interplex Electronics India Pvt. Ltd. - 2018 (13) G.S.T.L. J184 (S.C.)]

[Tax learner]

Thank u so much sir ji.

[Irudaya Raja]

Sir,

I have one doubt, what is 'Consolidated_notification'?,

Is it meant both of 'UTT(R)' & 'CGST(R)'?

[RAMKUMAR DURAI]

sir

one of my client is engaged in Adhesive coating business. He receive the various types of bolts from automobile industry for adhesive coating on them, he purchase the adhesives from other sate and do the coating process on the bolts received from the principal. The cost of adhesive comes around 50% of his invoice value.

His cutomers argue with him that this process ( coating process) comes under Job work with 12% GST only.

But we have doubt whether it should be taxed @18 % GST based on the following,

1.The adhesive is not supplied by the principal it is purchased by us.

2.The coating enhance the product torue quality

kindly confirm whether we can charge GST @18%, if yes what should be the HSN/SAC

[KASTURI SETHI]

Sh.Ramkumar Ji,

Pl. post your query independently under new Issue ID as this Issue ID has gone too lengthy. You will get comprehensive reply in this forum by tonight.

[Irudaya Raja]

Sir,

Anyone has aware that the New Circular No.126/45/2019-GST; dated 22nd-November'2019?

Please clarify

Regards,

IrudayaRaja

[Rajendra Prasad]

Dear Sethi Sir,

What is the Rate Applicable on Processing of Shrimp ?

[KASTURI SETHI]

Sh.Rajendra Prasad Ji,

You are an expert. You know each and every thing about GST and always remain updated. After Board's clarification, rate is to be determined on the basis of whether registered or not notwithstanding anomaly is still there. The phrase, 'manufacturing services' must be defined.

As per the present legal position, determine on the basis of 'registered or unregistered'.

[PAWAN KUMAR]

Dear Sir,

Manufacture as per erstwhile law :

the new product should come into existence. If job work is being done on any raw material/input and new manufactured product come into existence, then it will become manufacturing goods, otherwise not. if only any treatment or process undertake on goods belongings to other but the character of goods not changed after carrying out the treatment, it will not become manufacturing goods and is purely manufacture.

as per recent rate reduction and vide the circular no. 126, if job work is related to registered party then it will qualify as job work and become taxable under 12% and if job work is done for other unregistered parties then it will become manufacturing and the gst rate will be 18%. i hope the query is clear now.

[KASTURI SETHI]

After clarification from the Board, I agree with Sh.Pawan Kumar's views in toto. Now inference can be drawn that registration is a must for applicable of lower rate of tax i.e. 12%. Although taxable event is 'supply' under GST, yet the definition of 'manufacture' has not lost it relevance.

It means Govt.wants registration in order to plug the leakage of revenue in the guise of job-work.

[Atul Rathod]

Rightly said by Kasthuri JI. Still relavance of word manufacture does exist.