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TMI Blog2021 (10) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... e provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION AS PER THE APPLICANT The submissions made by Garware Industriees Limited, the applicant are as under:- 2.1 Garware Industriees Limited (herein referred as GIL) having GST Registration No. 27AAACY5779P1ZB for unit located at GUT No 374,376 378 Aurangabad Pune Road Waluj Aurangabad-431133 is engaged in processing and conversion of Plain Polyester Film into processed All Types of Polyester films (i.e. Dyed Film, Laminated Films, TS Films, PPF Films), GIL, an associate company of Garware Polyester Limited (herein referred as GPL), is covered by section 40A (2) (b) of the Income Tax Act, 1961. 2.2 GPL is a GST registered flagship company of the Garware Group and manufactures and sells all types of Polyester films like (a) Plain Films, (b) Laminated films / Sun control film manufactured from Dyed films (c) PPF Films etc. 2.3 GPL sends Plain Polyester Films along with all other required input (collectively referred to as 'inputs') to GIL for Manufacturing / converting of Plain P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with effect from 01-10-2019, prescribes 12% GST rate for all services by way of job work. This makes the entry at item (iv) which covers "manufacturing services on physical inputs owned by others" with GST rate of 18%, redundant." 2.9 "As Per Sec.2 (68) CGST Act, 2017, "Job work means any treatment or process undertaken by a person on goody belonging to another registered person and the expression job worker' shall be construed accordingly." 2.10 In view of the above, it may be seen that there is a clear demarcation between scope of the entries at item (id) and item (iv) under heading 9988 of Notification No. 11/2017-C.T.-(R) dated 28-06-2017. Entry at item (id) covers only job work services as defined in section 2 (68) of CGST Act, 2017, that is, services by way of treatment or processing undertaken by a person on goods belonging to another registered person. On the other hand, the entry at item (iv) specifically excludes the services covered by entry at item (id), and therefore, covers only such services which are carried out on physical inputs (goods) which are owned by persons other than those registered under the CGST Act. 2.11 In Job-Work as per GST following 3 condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n where the manufacturing services is by way of Job Work or other than Job Work respectively. 2.19 To Clarify the above situation CBIC issued Circular No 126/45/2019-GST dt 22/11/2019. It has been stated that the entry at item (id) under heading 9988 of Notification No. 11/2017-Central Tax (Rate) dated 28-06-2017 inserted with effect from 01-10-2019, prescribes 12% GST rate for all services by way of job work. This makes the entry at item (iv) which covers "manufacturing services on physical inputs owned by others" with GST rate of 18%, redundant. 2.20 However it may be seen that there is a clear demarcation between scope of the entries at item (id) and item (iv) under heading 9988 of Notification No. 11/2017- C.T -(R) dated 28-06-2017. Entry at item (id) covers only job work services as defined in section 2 (68) of CGST Act, 2017, that is, services by way of treatment or processing undertaken by a person on goods belonging to another registered person. On the other hand, the entry at item (iv) specifically excludes the services covered by entry at item (id), and therefore, covers only such services which are carried out on physical inputs (goods) which are owned by persons other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registered for the specific services which was shown by the taxpayer in the GST Registration in ARA-01. 3.5 In view of the above, the taxpayer's request could not be considered and may be rejected. Officer Submission dated 21.6.2021:- 3.6 In this context, it is submitted that 1) Applicant has made the subject application, on the matter that they have provided the services by way of Job-work to GPL. GPL sends plain polyester films along with all other required inputs to applicant who, after processing of Plain Polyester film and converted them to process and waste material return hack. Applicant proposes that service provided by it falls under the ambit of item (id) of heading 9988 of Notification No. 11/2017- Central Tax (Rate) because the service falls under the definition of job-work u/s 2(68) of CGST Act, 2017, hence they can charge GST on the same at 12% GST rate. 2) Annexure-1 statement of relevant facts of the application states that "M/s. Garware Polyester Limited sends Plain Polyester Films along with all other required input to Garware Industries Limited for manufacturing/converting of Plain Polyester film into Dyed//Laminated/TS Films on job-work basis. (Using ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so present. The Authorized Representatives made oral submission with respect to admission of their application. 4.2 Final Online e-hearing was held on 22.06.2021. The applicant was represented by Shri. M.M. Lele, (General Manager, Accounts) and Authorized Representative Shri. Tushar Parikh (C.A). Jurisdictional officer Shri. Deepak Gangurde, Asst. Commissioner CGST, Division-I, Commissionerate-Aurangabad, Rural Division was also present. The Authorized Representatives made oral and written submission. The Jurisdictional officer has also made oral submission in this matter. The m atter was heard. 05. DISCUSSIONS AND FINDINGS: 5.1 We have gone through the facts of the case, written and oral contentions made by both, the applicant and jurisdictional officer at the time of preliminary as well as the final hearings. 5.2 The basic issue before this authority is whether the activity carried out by the applicant as per the agreement with M/s Garware Polyester Limited (GPL) amounts to job-work and if yes, whether the said activity falls under clause (id) Heading 9988 of Notification no. 20/2019 dt 30/09/2019. 5.3 The applicant has submitted that, GPL supplies Plain Polyester Films or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the quantity and description of input goods. The applicant has submitted sample copy of challans pertaining to subject matter. 5.8 From the submissions made by the applicant we find that, after they have undertaken process on the raw materials supplied by their principal which is a GST registered entity, the new product that emerges does not appear to have a distinct name, character and use and therefore the applicant cannot be considered as a manufacturer of the impugned products. Further, the title to the raw materials including plain polyester films and well as the dyed/Laminated/TS films are with GPL and not the applicant. The applicant also stated during the said hearing that the procedures mentioned in Section 143 of the CGST Act, 2017 are being followed in respect of the subject transaction. 5.9. Section 143 (1) (a) of the CGST Act, 2017 specifies that materials/inputs sent out for Job Work should be brought back after completion of job work or otherwise, within one year of their being sent out for job work to any place of business, without payment of tax. Also, capital goods, other than moulds and dies, jigs and fixtures, or t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iff Act, 1975 (51 of 1975). Explanation.-"man made fibres" means staple fibres and filaments of organic polymers produced by manufacturing processes either,- (a) by polymerisation of organic monomers to produce polymers such as polyamides, polyesters, polyolefins or polyurethanes, or by chemical modification of polymers produced by this process [for example, poly(vinyl alcohol) prepared by the hydrolysis of poly(vinyl acetate)]; or (b) by dissolution or chemical treatment of natural organic polymers (for example, cellulose) to produce polymers such as cuprammonium rayon (cupro) or viscose rayon, or by chemical modification of natural organic polymers (for example, cellulose, casein and other proteins, or alginic acid), to produce polymers such as cellulose acetate or alginates. 2.5 (ii) Manufacturing services on physical inputs (goods) owned by others, other than (i) above 9 5.13 Entry at item (id) under heading 9988 of Notification No.11/2017-Central Tax Rate dated 28.06.2017 was inserted with effect from 01.10.2019, by per Notification No. 20/2019- Central Tax (Rate) dt. 30.09.2019 and subsequent to the same the relevant entry at Sr. No, wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s body building; 9 (id) Services by way of job work other than (i), (ia), (ib) and (ic) above 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 (a) 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 (a) 6per cent. 6 "(iii) Tailoring services 2.5 (iv) Manufacturing services on physical inputs (goods) owned by others, other than (i), (ia), (ib), (ic), (id), (ii), (iia) and (iii) above. 9 5.14 From the discussions above, we find that, the services provided by the applicant does not fall under (i), (ia), (ib), (ic) of the above mentioned notification. We have already found that the impugned services supplied by the applicant are in the nature of jobwork. We furt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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