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TMI BlogGST Rate for Job WorkX X X X Extracts X X X X X X X X Extracts X X X X ..... 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 - Reply By Rajagopalan Ranganathan - The Reply = Sir, Please refer to Sl. No. 26 (ii) of Notification No. 11/2017-Central Tax (Rate) for services. The rate specified is 9% CGST + 9% SGST. This rate is applicable to (i) 9988- Manufacturing services on physical inputs (goods) owned by others, (ii) 99889-Other manufacturing services and (iii) 998898-Other manufacturing services n.e.c. - Reply By Basha AbdulRazack - The Reply = Sir, Thank you for your repl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, actually i am asking about as per new notification dated 30.09.2019, what is the GST rate for Job work charges for Service Code 9988 Thanks Regards Abdul Razack - Reply By KASTURI SETHI - The Reply = 9988 -Manufacturing services on physical inputs (goods) owned by others : It is job work. (service). It has sub-headings 99889-Other manufacturing services 12% (6%+6%)* 998899 -Other manufacturing services n.e.c. 12 % (6%+6%) * * Which is not specifically mentioned will attract GST rate @12% and others i.e. Job-work in relation to bus body building will attract 18%, Diamond 0.75 %, goods belonging to Ch.48 or 49 will attract 6% etc. - Reply By Basha AbdulRazack - The Reply = Thank You sir - Reply By PAWAN KUMAR - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Reply = Dear Sir, as per my view, gst rate is as under : 9988 (i) - 5% 9988 (ii) - 18% 9998-Other Domestic Services - 18%. - Reply By KASTURI SETHI - The Reply = W.e.f. 1.10.19, if job-work process amounts to manufacture, rate of tax is 18% and if job-work process does not amount to manufacture, rate of GST is 12%. For example; powder-coating does not amount to manufacture, it will attract 12%. The job-work processes like machining, casting etc. amounts to manufacture, hence this job-work will attract GST @18%. So registered person has to differentiate/identify what job-work amounts to manufacture and what does not amount to manufacture. Very tedious indeed. Here the definition of 'manufacture', 'manufacturing pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cess' provided in Section 2(f) of Central Excise Act can help which is as follows:- Section 2(f) of Central Excise Act [(f) manufacture includes any process, - (i) incidental or ancillary to the completion of a manufactured product; (ii) which is specified in relation to any goods in the Section or Chapter notes of [the Fourth Schedule] as amounting to [manufacture; or] [(iii) which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer,] an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the word manufacturer shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account;] [(f) manufacture includes any process, - (i) incidental or ancillary to the completion of a manufactured product; (ii) which is specified in relation to any goods in the Section or Chapter notes of [the Fourth Schedule] as amounting to [manufacture; or] [(iii) which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer,] and the word manufacturer shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account;] - Reply By Alkesh Jani - The Reply = Sir, The definition of Job-work is defined at Section 2(68) of CGST Act,2017 and is as below:- (68) job work means any treatment or process undertaken by a person on goods belonging to another registered person and the expression job worker shall be construed accordingly. Now, manufacture of goods is s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ettled by Hon ble Supreme Court in various decisions, few are listed below - To levy Central Excise duty, it is necessary that a new article should come into existence as a result of manufacturing activity Hawkins Cooker Ltd. Vs. Collector 1997 (96) ELT 507 (S.C.) = 1996 (12) TMI 77 - SUPREME COURT - Incidental or ancillary process must be an integral and inextricable part of production or manufacture resulting in presenting a finished or manufactured product bearing a distinct name U.O.I vs. Keshedeo Shivprasad 2002 (145) ELT A163 (SC) = 1998 (2) TMI 609 - SUPREME COURT - Manufacturing process continues till article is put in suitable packaging in which it is marketed J.K.Synthetics Ltd. Vs. Collector- 1998 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (97) ELT 310 (Tri.) = 1997 (3) TMI 250 - CEGAT, NEW DELHI Hope this will help in the matter. Thanks, With Regards - Reply By Ganeshan Kalyani - The Reply = Yes, the residual entry is made at two clause. 12% would be applicable if the process does not amounts to manufacture and 18% would be applicable if the process amount to manufacture. Thus a retook in to the process by the tax payers is necessary. The change is with effect from 01.10.2019. - Reply By Irudaya Raja - The Reply = I have one doubt in KASTURI SETHI Sir's reply. Sir, as per your example powder-coating does not amount to manufacture , but as per Section 2(f) of Central Excise Act , manufacture includes any process, - i) incidental or ancillary t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the completion of a manufactured product; So that, if the Powder-coating has done for completion of a final product, does it amount to manufacture? - Reply By Alkesh Jani - The Reply = Dear Irudaya Raja, The reply given by Sh. Kasturiji Sir, is perfectly correct, as the definition of erstwhile law was reproduced. The doubt raised by you is settled by Hon ble Supreme Court in case of Keshedeo Shivprasad, cited above. Thanks, - Reply By KASTURI SETHI - The Reply = 2008 (10) S.T.R. 317 (Tri. - Bang.) = 2008 (1) TMI 105 - CESTAT BANGALORE A.G. SHIBU Versus COMMISSIONER OF CUS., C. EX. S.T., COCHIN - Reply By KASTURI SETHI - The Reply = Just sharing illustrations. Powder coating neither changes character nor functioning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the goods. It is a cosmetic exercise.It has only aesthetic value. For example ; if we mix tea in the milk, it will change the character and functioning of milk and a new product (beverage-tea) is emerged. Similarly, Curd, paneer, ghee etc. are manufactured from milk by different processes. Similarly, sugar is manufactured from sugarcane. Jaggery is manufactured from sugarcane. Character and functioning of sugarcane is changed by various processes. If any job-work process changes the character and functioning of any goods, it will amount to manufacture, otherwise not. - Reply By Tax learner - The Reply = Sir ji U r talking about powder coating but one of my client has work of electroplating so he will be also c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overed under reduced tax rate of 12 % ? - Reply By atul rathod - The Reply = I understand that electroplaring amounts to manufacture and therefore 12% would be applicable under 26(i)(id) if it is done for registered person and at 18% if the same is done for unregistered person under 26(iv) - Reply By Tax learner - The Reply = Dear sir How did u get to know that it amounts to manufacture ? I think its not. - Reply By KASTURI SETHI - The Reply = 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 wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 BANGAL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ORE (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 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sumed that the process does not amount to manufacture. [Commissioner v. Interplex Electronics India Pvt. Ltd. - 2018 (13) G.S.T.L. J184 (S.C.)] - Reply By Tax learner - The Reply = Thank u so much sir ji. - Reply By Irudaya Raja - The Reply = Sir, I have one doubt, what is 'Consolidated_notification'?, Is it meant both of 'UTT(R)' 'CGST(R)'? - Reply By RAMKUMAR DURAI - The Reply = 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 - Reply By KASTURI SETHI - The Reply = 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. - Reply By Irudaya Raja - The Reply = Sir, Anyone has aware that the New Circular No.126/45/2019-GST; dated 22nd-November' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;2019 ? Please clarify Regards, IrudayaRaja - Reply By Rajendra Prasad - The Reply = Dear Sethi Sir, What is the Rate Applicable on Processing of Shrimp ? - Reply By KASTURI SETHI - The Reply = 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'. - Reply By PAWAN KUMAR - The Reply = Dear Sir, Manufacture as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r now. - Reply By KASTURI SETHI - The Reply = 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. - Reply By Atul Rathod - The Reply = Rightly said by Kasthuri JI. Still relavance of word manufacture does exist. - GST Rate for Job Work - Query Started By: - Basha AbdulRazack Dated:- 3-10-2019 Goods and Services Tax - GST - Got 26 Replies - GST - Discussi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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