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2021 (11) TMI 291 - AAR - GSTRate of GST - Job-Work service - business of plating Industry, approved for Electroplating and surface treatment of aerospace and non-aerospace components - Goods owned by others - whether the job work services provided by the applicant are covered under clause (id) or clause (iv) of entry number 26 of Notification No.11/2017-Central Tax(Rate) dated 28-06- 2017, as amended, by Notification 20/2019 Central Tax (Rate) dated 30-09-2019, effective from 01.10.2019, for the heading 9988 and also the rate of GST applicable thereon? HELD THAT - It could be inferred from circular. No.126/45/2019-GST dated 22-11-2019, issued by the CBIC, that the job works defined under Section 2 (68) of the CGST Act i.e. job work services by way of treatment or processing undertaken by a person on goods belonging to another registered person are covered under clause (id) of entry number 26 of the Notification 11/2017-Central Tax (Rate) dated 28.06.2017, as amended, and clause (iv) of the notification supra covers only services which are excluded under clause (id) and also carried out on physical inputs (goods), owned by the unregistered person/s. In the instant case the applicant provides the job work services on the goods belonging to registered persons and hence are covered under clause (id) of entry number 26 of the Notification 11/2017-Central Tax (Rate) dated 28.06.2017, as amended and accordingly attract GST rate of 12%.
Issues Involved:
1. Determination of GST rate applicable for job work services. 2. Clarification on whether job work services fall under specific entries in the GST notification. Analysis: 1. The applicant, a Private Limited Company engaged in the plating industry, sought an advance ruling to determine the GST rate applicable for their job work services. They specifically inquired about the GST rate for job work services under different categories as per the GST notification. 2. The admissibility of the application was considered based on the questions raised, which pertained to the applicability of a notification under the CGST/KGST Act and the determination of tax liability on goods or services. The application was deemed admissible under the relevant sections of the CGST Act 2017. 3. The applicant provided detailed information about their business operations, stating that they offer various electroplating and surface treatment services to registered GST companies. They procure raw materials for these services and conduct multiple chemical processes and testing in their laboratory on components provided for job works. 4. The applicant's interpretation of the law was centered around Notification 11/2017, which they believed classified their job work services under manufacturing services on physical inputs owned by others, attracting an 18% GST rate. They also referenced subsequent notifications and circulars to support their argument for the applicable GST rate. 5. During the personal hearing proceedings, the applicant's representative reiterated the facts presented in their application. The authority discussed the provisions of the CGST Act and the KGST Act, highlighting their similarity in relevant matters and differences in specific provisions. 6. After considering the applicant's submissions, the authority deliberated on the core issue of whether the job work services provided fell under a specific entry of the GST notification. Referring to a circular issued by the CBIC, the authority clarified the distinction between the entries related to job work services and manufacturing services on physical inputs owned by others. 7. The authority concluded that the job work services provided by the applicant, which involved processing goods belonging to registered persons, fell under a particular entry of the GST notification, attracting a GST rate of 12%. Therefore, the ruling determined that the applicant's job work services were covered under a specific clause of the notification, leading to the application of a 12% GST rate. This comprehensive analysis of the legal judgment provides a detailed overview of the issues involved, the applicant's arguments, and the authority's ruling based on the interpretation of relevant provisions and notifications under the GST Act.
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