Job work service - stiching of upper of Shoes, Goods and Services Tax - GST

[rakesh rohilla]

Dear Experts,

previously we are charging 18% GST on job work of stiching of upper of shoes upto jan 2018. Now there are some persons who charge only 5% on this service and my SAC code is 00441480. Please tell me whether i have to charge 18% or 5%.

Posts / Replies

[KASTURI SETHI]

First of all your SAC code 00441480 is not correct. It pertains to erstwhile Service Tax and it is general code and not for specific service.

Secondly it rate of GST depends upon what type of shoes is being manufactured. Whether upper shoes are meant for sports shoe or other shoes. So pl. let me know your stitching is meant for which type of shoes. Shoes fall under Chapter 64 under GST Tariff Heading Nos. 6401 to 6406.

[rakesh rohilla]

Dear Kasturi Sir, we are doing all kinds of shoes stiching sports and other also. We receipt all raw material including threads from the prinipal i.e. our party. Our job is only to stich and return the same after complete. We are not the seller of shoes or manufacturer. The tariff heading you provides are right i.e. 6401 to 6406 but these are for goods and we do job work only. I have checked all the services in GST Portal and there is no specific code for job work service regarding stiching therefore i have selected SAC Code 00441480 and amended my Registration Certificate. Please help me with your vast knowledge and guide me.

Thanks for your prompt reply.

[KASTURI SETHI]

Your job work is covered under SAC 9988 . As on 17.1.18, the following rates of GST are applicable for job work and your activity is covered in the last attracting 9% +9%.

26	Heading 9988 (Manufacturing services on physical inputs (goods) owned by others)	(i) Services by way of job work in relation to- (a).... Printing of newspapers; [(b).. Textiles and textile products falling under Chapter 50 to 63 in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975);] [(c)... all products falling under Chapter 71 in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975);] (d)... Printing of books (including Braille books), journals and periodicals; [x           x           x] [(da) printing of all goods falling under Chapter 48 or 49, which attract CGST @ 2.5 per cent. or Nil;] (e) Processing of hides, skins and leather falling under Chapter 41 in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). [(f) all food and food products falling under Chapters 1 to 22 in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975); (g) all products falling under Chapter 23 in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), except dog and cat food put up for retail sale falling under tariff item 2309 10 00 of the said Chapter; (h) manufacture of clay bricks falling under tariff item 6901 00 10 in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975);] [(i) manufacture of handicraft goods. ........ Explanation. - The expression “handicraft goods” shall have the same meaning as assigned to it in the Notification No. 32/2017-Central Tax, dated the 15th September, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 1158 (E), dated the 15th September, 2017 as amended from time to time.]	2.5	-
		[(ia) Services by way of job work in relation to - (a).... manufacture of umbrella; (b)... printing of all goods falling under Chapter 48 or 49, which attract CGST @ 6 per cent.	6	-]
		[(ii) Services by way of any treatment or process on goods belonging to another person, in relation to - (a).... printing of newspapers; (b)... printing of books (including Braille books), journals and periodicals. [(c)... printing of all goods falling under Chapter 48 or 49, which attract CGST @ 2.5 per cent. or Nil.]	2.5	-
		[(iia) Services by way of any treatment or process on goods belonging to another person, in relation to printing of all goods falling under Chapter 48 or 49, which attract CGST @ 6 per cent.	6	-]
		(iii) Manufacturing services on physical inputs (goods) owned by others, other than (i), [(ia), (ii) and (iia)] above.	9	-]
[27

[KASTURI SETHI]

Any contract between job worker and principal ?

[rakesh rohilla]

Dear Kasturi Sir, there is no contract between us. we just do the job work only. I have go through the list which you had mentioned. I have cross checked and find on gst rate list on services as under point no. 12 :-

Services by way of job work in relation to-

(a) Printing of newspapers;

(b) Textile yarns (other than of man-made fibres) and textile fabrics;

(c) Cut and polished diamonds; precious and semi-precious stones; or plain and studded jewellery of gold and other precious metals, falling under Chapter of HSN;

(d) Printing of books (including Braille books), journals and periodicals;

(e) Processing of hides, skins and leather falling under Chapter 41 of HSN. and the rate is 5%. I think in market some people are charging 5% as per point in

(e). regarding job work. so we are also charging 5%.

I have checked all the services mentioned on gst portal and i have not found the SAC code which you had mentioned i.e. 9988. There is only one SAC code which i have mentioned earlier 00441480 so i have choosen this.

[KASTURI SETHI]

I have sent you an extract from EXCUS CD of CENTAX Publications. R. K.Jain.

[KASTURI SETHI]

You are mentioning old accouinging code which is incorrect.

[rajkumar shukla]

In my view correct SAC Code is 9988 as suggested by Kasturi ji.entry no 26 (ea) of 11/2017( cgst) fixes rate against services by way of job work in relation to.......manufacture of leather goods or footwear falling under chapter 42 or 64 in the first schedule to the customs tariff act as 2.5% means 5% in all.

[rajkumar shukla]

The entry no. ea added wef 25.1.18.

[rakesh rohilla]

Dear Kasturi sir and Raj kumar shukla sir, Thanks for sharing your knowledge with me. Now i am fully satisfied with correct rate of GST and Correct SAC Code.