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TMI Blog2022 (11) TMI 630X X X X Extracts X X X X X X X X Extracts X X X X ..... registered person on the physical inputs owned by another registered person is a Job work'. In the case at hand, the applicant is a registered person and when he undertakes work on the goods belonging to another registered person, then the nature of work of the applicant is job work . The SAC of the Service Offered by applicant is 998816 i.e., Other food product manufacturing services and the rate of tax as seen from the above entry is 2.5 % CGST and 2.5% SGST. - A.R.Com/03/2022 TSAAR Order No.53/2022 - - - Dated:- 14-9-2022 - SRI S.V. KASI VISWESWARA RAO, AND SRI SAHIL INAMDAR, MEMBER [ORDER UNDER SECTION 98(4) OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 AND UNDER SECTION 98(4) OF THE TEALANGANA GOODS AND SERVICES TAX ACT, 2017.] ****** 1. M/s. Gandour India Food Processing Private Limited, Survey No.172, 173, Phase IV, IDA, Cherlapally, Hyderabad, Telangana 500 051 (36AABCG1404G1Z6) has filed an application in FORM GST ARA-01 under Section 97(1) of TGST Act, 2017 read with Rule 104 of CGST/TGST Rules. 2. At the outset, it is made clear that the provisions of both the CGST Act and the TGST Act are the same except for certain provisions. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 988 with applicable tax rate of 5%. 5. QUESTIONS RAISED: Q1. GST Tax rate on Service Accounting Code 998816. 6. LEGAL PROVISIONS: The definition of 'Job work is as under: What is Job work? Section 2(68) of the CGST Act, 2017 defines job work as 'any treatment or process undertaken by a person on goods belonging to another registered person'. The one who does the said job would be termed as 'job worker'. The ownership of the goods does not transfer to the job worker but it rests with the principal. The job worker is required to carry out the process specified by the principal, on the goods. With regard to IGST liability, Sec. 13 of IGST Act, 2017 reads as under:- 13. (1) The provisions of this section shall apply to determine the place of supply of services where the location of the supplier of services or the location of the recipient of services is outside India. (2) The place of supply of services except the services specified in sub-sections (3) to (13) shall be the location of the recipient of services: Provided that where the location of the recipient of services is not available in the ordinary course of business, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification 78/2020, they required to mention 6-digit SAC on their service invoices w.e.f. 01.04.2021. Accordingly, the SAC code applicable for them is 998816. But they could not find separate tax rate for this 6-digit code there by concluding that the tax rate of SAC code 9988 at 5% to applied for the six digits as well. Further, it is submitted that: 1. That they were following the 4-digit code and as the notification 78/2020, they required to mention 6-digit SAC on their service invoices w.e.f. 01.04.2021. Accordingly, the SAC code applicable for them is 998816. 2. But they could not filed separate tax rate for this 6-digit code in the service code classification. When the requirement of 6-digit code is given, the tax rates also should have been released simultaneously to this effect. 3. But they could not find any, thus the clarification sought. Further also submitted that: 1. As per rate notification 31/2017, dt. 13-10-2017, serial number 26, Heading 9988 clause (f) all food and food products falling under chapter 1 to 22 in the first schedule to the Customs Tariff Act, 1975 (51 of 1975) . Out products falling under chapter 19 of the Customs Tariff Act and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant is a portion of manufacturing process of the customer of the applicant and therefore, the activity of the applicant is covered under SAC 9988. Job-work is defined under Section 2(68) as below: Section 2(68) of CGST Act defines 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. Thus the activity of undertaking manufacturing services by a registered person on the physical inputs owned by another registered person is a Job work'. In the case at hand, the applicant is a registered person and when he undertakes work on the goods belonging to another registered person, then the nature of work of the applicant is job work . The applicable rate of service tax is given vide Notification No. 11/2017-CT(R), dt. 28-06-2017, the relevant portion of which is extracted below: 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) Textile yarns (other than of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - (iii) Manufacturing services on physical inputs (goods) owned by others, other than (i) and (ii) above. 9 - ; Notification No. 31/2017-C.T (Rate) dated 13.10.2017 amended entry at Sl.No. 26 of Notification No. 17/2017-C.T (Rate) as under: (h) against serial number 26,in column (3), - (i) in item (i), for sub-item (c), the following sub-item shall be substituted, namely: - (c) all products falling under Chapter 71 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975); ; (ii) in item (i),after sub-item (d), the following sub-item shall be inserted, namely: - (da) printing of all goods falling under Chapter 48 or 49, which attract TGST @ 2.5per cent. or Nil; (iii) in item (i), after sub-item (e), the following sub-items shall be inserted, namely: - (f) all food and food products falling under Chapters 1 to 22 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975); (g) all products falling under Chapter 23 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975), except dog and cat food put up for retail sale falling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nting of books (including Braille books), journals and periodicals; (da) printing of all goods falling under Chapter 48 or 49, which attract TGST @ 2.5per cent. or Nil; (e) [xxx] (ea) [xxx] (f) all food and food products falling under Chapters 1 to 22 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975); (g) all products falling under Chapter 23 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975), except dog and cat food put up for retail sale falling under tariff item 23091000 of the said Chapter; (h) [xxx] (i) manufacture of handicraft goods. Explanation . - The expression handicraft goods shall have the same meaning as assigned to it in the notification issued in G.O.Ms No. 266 Revenue (CT-II) Department, dt. 29-11-2017 and as amended from time to time. [xxx] 2.5 - Further, in paragraph 4 relating to Explanation, for the above notification is as under: 4. Explanation.- For the purposes of this notification,- (i) Goods includes capital goods. (ii) Reference to Chapter , Section or Heading , wherever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) 498 Heading 9988 Manufacturing services on physical inputs (goods) owned by others 499 Group 99881 Food, beverage and tobacco manufacturing services 500 998811 Meat processing services 501 998812 Fish processing services 502 998813 Fruit and vegetables processing services 503 998814 Vegetable and animal oil and fat manufacturing services 504 998815 Dairy product manufacturing services 505 998816 Other food product manufacturing services A combined reading of the above notifications, explanation and SAC Services, the SAC of the Service Offered by applicant i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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