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Confusion in the Job work notification

 

OCTOBER 03, 2019

By S Narayanan, Advocate

NOTIFICATION 11/2017-CTR has been amended by notification 20/2019-CTR dated 30.09.2019 [w.e.f 01.10.2019].

THE inserted entry Under Srl. No. 26 to Notification No. 11/2017- CT ( Rate) dated 28.6.2017 has a residual one in the form of Clause " (id) Services by way of job work other than (i), (ia), (ib) and (ic) above"   which attracts 12 % (6 + 6)". And the classification of SAC code 9988 by itself qualifies as   (Manufacturing services on physical inputs (goods) owned by others), which means it is "job work".

The said Srl No. 26 has another residual in clause (iv) "Manufacturing services on physical inputs (goods) owned by others, other than (i), (ia),   "(ib), (ic), (id),"  (ii), (iia) and (iii) above", which attracts 18 % (9 + 9) tax.

Issue involved 

As per said amended Notification "all the job work service activity which falls under residual category" (id) Services by way of job work other than (i), (ia), (ib) and (ic) above"   would attract 12 % ( 6 + 6) , as the Government have provided the reduction from 18 % to 12 %. And If that be the case, the provisions of clause (iv) providing another residual clause attracting 18 % tax (9 + 9) becomes redundant.

Job work -  Truck body building

The inserted entry Under Srl. No. 26 to Notification No. 11/2017- CT ( Rate) dated 28.6.2017 prescribes rates of tax for job work and the classification of SAC code 9988 by itself qualifies as   (Manufacturing services on physical inputs (goods) owned by others), which means it is "job work".

As per Srl No. 26  (ic) "Services by way of job work in relation to bus body building"   attracts rate of tax of 18 %  (9 + 9). 

Issue involved

There is no mention of rate of tax for "Services by way of  job work in relation to truck body building carried out on truck chassis supplied by the other" though the activity of body building of bus and of truck  is more or less, one and the same. Hence, it is suggested that when the body is built on truck chassis, the same should also attract 18 %(9+9).

CBIC is requested to provide immediate clarification.

(The views expressed are strictly personal.)

(DISCLAIMER : The views expressed are strictly of the author and Taxindiaonline.com doesn't necessarily subscribe to the same. Taxindiaonline.com Pvt. Ltd. is not responsible or liable for any loss or damage caused to anyone due to any interpretation, error, omission in the articles being hosted on the site)

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