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Galvanizing GST rate as per latest notification 30.9.2019, Goods and Services Tax - GST

Issue Id: - 115608
Dated: 30-10-2019
By:- rajendar m
Galvanizing GST rate as per latest notification 30.9.2019

  • Contents

1. what is gst rate galvanizing process on steel or material supplied by registered principal ?

2. is galvanizing amounts to manufacture or manufacture process or manufacture services ?

3. If zinc purchased by job worker for galvanizing on material supplied by registered principal what is gst rate?

4. If zinc is supplied by principal to job worker for galvanizing along with material by registered principal what is gst rate?

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Showing Replies 1 to 8 of 8 Records

1 Dated: 30-10-2019

Point-wise reply is as under:-

1. 18% under HSN 9988, process being not amount to manufacture. No new product emerged.

2. Galvanizing does not amount to manufacture. Board's circular based on Supreme Court judgement is appended below:-

"Manufacture - Galvanisation does not amount to manufacture within Section 2(f) of Central Excise Act

Circular No. 19/19/94-CX, dated 9-2-1994

3. As per definition of job-work under Section 2(68) of CGST Act, if zinc is purchased by the job-worker and used, his activity would be out of the scope of job-work. However, Board's circular allows to use inputs purchased by the job-worker. The Act is to be followed.

4. It would qualify as job-work but activity would fall under the category of 'manufacturing service' and it would attract GST @18%.

Had activity amounted to manufacture, it would have attracted residuary entry (other than specific) i.e. GST @12%. This is not situation for your activity. This is hypothetical situation in the absence of definition of 'manufacturing services' under GST Acts.

Also go through replies posted against Issue ID no. 115585 dated 25.10.19

2 Dated: 30-10-2019
By:- rajendar m

i reviewed my self and searched for answer..

i got the following information on search..

Manufacture definition purpose

As per Chapter note 4 of Chapter 73 of first schedule of Central Excise Tariff Act, 1985 (1 of 1986) "galvanization" of iron and steel products falling under Chapter 73 amount to "manufacture".

Manufacture under Central Excise Act - Deemed Manufacture

Any activity specified in the section or chapter notes of the 1st schedule to the CETA will be deemed to be manufacture. The Govt has power to declare any process as manufacture in terms of chapter notes or section notes to the 1st schedule to the CETA.

For example, Galvanization, Metallization, Painting or Decorating on glasses, cutting of marble blocks into slabs are manufacture because they are named in the 1st schedule to the CETA.

Supported Case Law - Galvanizing is Manufacture

Custom, Excise & Service Tax Tribunal D N Agarwal Managing Director vs Ghaziabad on 4 September, 2018 = 2018 (9) TMI 171 - CESTAT ALLAHABAD


that the appellant was undertaking the process of galvanization of seamless steel tubes and parts of steel structure, on job work basis for M/s ABB Ltd.

Revenue entertained a view that the appellants are required to pay duty of excise on the galvanized pipes, inasmuch as galvanization amounts to manufacture in terms of the Chapter note 4 of Chapter 73 of CETA, 1985.

Revenue, we find that in terms of Chapter note 4 of Chapter 73, the process of galvanization of the items of Chapter 73 shall amount to manufacture.

prior to the introduction of Chapter 4, process of galvanization was held as non manufacture process by the Hon'ble Supreme Court.

Notification on Job work services:

From 01.10.2019. Vide Notification No. 20/2019- Central Tax (Rate) dt. 30.09.2019 effect has been given to the said decision by making following amendments to Sr. No. 26 of Notification No. 11/2017 – CT (R) as under:

With ref. to point No. (iv) of above notification, Galvanizing process which comes under Manufacturing with gst rate@18%.

pls. study the case law..suggest if any..

3 Dated: 30-10-2019

All the case laws (whether referred by me or you) pertain to the period prior to 1.7.17. We are to follow the definition of 'manufacture' provided under Section 2 (72) of CGST Act.

Section 2(72) of CGST “manufacture” means processing of raw material or inputs in any manner that results in emergence of a new product having a distinct name, character and use and the term “manufacturer” shall be construed accordingly;

Keeping in view your final product and the role/use/function of galvanization upon thereof, you can judge yourself whether it qualifies the parameters prescribed in the above definition or not.

In my view, your activity will be covered under Serial No.26 (iv) and NOT under (id) and hence it would attract GST @18% and not 12%. There is no escape route from GST@ 18%.

4 Dated: 31-10-2019

Old case laws just help us to understand the issue. It is also worth mentioning that after the judgement of Supreme Court the department took u-turn. It should not happen. The department also changed its stand in some other cases also regarding the issue of 'manufacture'.

5 Dated: 31-10-2019

In the absence of the definition of 'manufacturing services' under CGST Act, we can assume that the manufacturing services include only those processes/services which do not amount to manufacture e.g. fitting luggage carrier on the roof of a car, fitting mudguard, bell, basket etc. on bicycle. So many examples can be given. In Service Tax regime, the process which amounted to manufacture was included in the Negative List. The same analogy can be applied here. Anyhow as already explained in another query, Govt. should clear the air by way of definition or circular.

6 Dated: 19-3-2020
By:- JM Kishore

@ Sri Kasturi Seth.

Sir, pls don't confuse the trade with brining new concepts like "manufacture" into GST. There is no concept of levy of GST on the basis of manufacture. On job work, the CBIC had clarified vide Circular No. 126/45/2019-GST, dated 22-11-2019 that

(1) if the supplier of inputs is a registered person under GST, 12% rate is applicable for job work.

(2) If the supplier of inputs is not registered, then 18% is applicable. Pls modify your reply accordingly before it cause further damage to the trade and industry.

7 Dated: 19-3-2020

Dear Sh.J.M.kishore Ji,

I am thankful to you for reading my views and expressing your kind views. I have posted my views on 31.10.19 and Board has clarified on 22.11.19. It means prior to the issuance of this very circular, things were fluid.That is why Board has clarified. In the light of Board's circular, my views are outdated and has no relevance now. Thus we can say that difference of opinion always yields better results.

8 Dated: 21-3-2020

Dear Querist,

For the purpose of enrichment of your knowledge, I am bringing to your notice an article titled as , "Job Work And Manufacturing Service" published in GST Law Times Vol. 34 : Part 3 : 19th March, 2020 at page J 65. It is worth reading.


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