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2019 (11) TMI 41 - AAR - GSTLiability of GST - Rate of tax - services rendered by the applicant on quality testing and certification of gold ornaments - HELD THAT - The Jewellery Manufacturing Services includes gold maintenance / repair works, which falls under service Classification Code 998892. As per Section 2 (68) of the CGST Act, 2017; Job work is defined as undertaking any treatment or process by a person on goods belonging to another registered person and the expression job worker shall be construed accordingly. The rate of GST applicable for manufacturing services on physical inputs (goods) owned by others is 5%; if undertaken on goods belonging to registered persons as per SI No.26 (i) (c) and 18% GST, if job work undertaken on goods belonging to unregistered persons as per SI No. 26 (iv) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017. As per Section 22 of CGST/SGST Act, 2017; every supplier of services is required to obtain registration only when his aggregate turnover, to be computed on all India basis, in a financial year exceeds the threshold limit of ₹ 20 lakhs.
Issues:
- Tax liability and rate for quality testing and certification of gold ornaments - Tax liability for testing and appraisal of gold ornaments - Tax liability for gold maintenance and repair works - Tax liability for printing emblems or embossing on ornaments - Tax liability for cutting, shaping, and converting gold ornaments - Tax liability for job works below a certain turnover threshold Analysis: - The applicant sought an advance ruling on the tax liability and rate for quality testing and certification of gold ornaments. The services provided fall under Service Classification Code 998346 for technical testing and analysis services. The applicable GST rate for this service is 18% as per Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017. - Regarding the testing and appraisal of gold ornaments, which includes certifying the grade of goldsmith works, the services are also classified under SAC 998346. The GST rate applicable remains at 18% as per the same notification. - Gold maintenance and repair works, such as enlarging gold chains or cutting and polishing gold ornaments, are considered part of Jewellery Manufacturing Services under Service Classification Code 998892. The GST rate for such manufacturing services on goods owned by others is 5% if undertaken for registered persons and 18% if done for unregistered persons, as per Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017. - The activity of printing emblems or embossing on ornaments, as well as cutting, shaping, sizing, and converting gold ornaments into coins or biscuits, also falls under Jewellery Manufacturing Services (998892). The applicable GST rates remain the same as mentioned above. - Lastly, the question of tax liability for job works below a certain turnover threshold was addressed. As per Section 22 of the CGST/SGST Act, 2017, a supplier of services is required to obtain registration only if the aggregate turnover exceeds the threshold limit of ?20 lakhs. Therefore, if the total turnover of the applicant is below ?19 lakhs per annum, there would be no tax liability under GST laws.
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