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Cus - Export of non-basmati rice - Notification 20/2023 insofar as it denies the benefit of the transitional arrangement as contained in para-1.05 of the FTP 2023, is bad in law: HCCus - Refund of SAD - 102/2007-Cus - Areca Nut and Supari are one and the same - Objections with regard to name, nature and status of importer or buyers or the end use of goods purchased by them etc. are extraneous: HCCX - Interest on Refund - Since wrong order annexed by petitioner in paper book, Bench is unable to proceed further - Petition is dismissed with liberty to file a fresh one: HCGST - No E-way bill - When petitioner imports machinery and after Customs clearance, transports same to his own factory, it cannot be said that such a transportation would fall within the definition of term 'supply' - Penalty imposable under second limb of s.129(1)(a): HCGST - Fix responsibility on officers who allowed BG to lapse - Petitioner not justified in not renewing BG - Cost of Rs.15 lacs imposed, to be paid to PM Cares Fund: HCGST - Since the parties agree that petition can be disposed of on the basis of records available before Appellate Authority, petitioner is directed to enclose all documents filed before Appellate Authority in a compilation, in form of a paper book: HCWrong RoadST - Whether any service is used for personal consumption or not is certainly question of fact and being question of fact, no substantial question of law arises: HCGovt proposes to amend Geographical Indication of Goods Rules; Draft issued for feedbackST - If what has been paid as tax is without authority of law, Revenue should refund the same - Denial of credit would result in the whole exercise being tax neutral: HCWarehousing Authority notifies several agri goods to be stored in only registered warehousesST - Even if the petitioner may have a case on merits, it is best left to be decided by the Appellate Authority under the hierarchy prescribed under the FA, 1994: HCUS FDA okays Eli Lilly Alzheimer’s drugGST - Petitioner challenges jurisdiction of assessing officer - Petitioner is entitled to file an appeal u/s 107 by availing an alternate efficacious remedy: HCFive from Telangana killed in car accident on Pune-Solapur HighwayGST - Existence of an alternative remedy is a material consideration but not a bar to the exercise of jurisdiction: HCHush money case against Donald Trump - Sentencing deferred to Sept 18GST - It is open to a trader to take goods by whichever route he opts, unless the law otherwise requires, destination point being intact: HCDeadly hurricane Beryl smashes properties in JamaicaGST - Conclusion that taxable person is providing a service to supplier while taking the benefit of a discount by facilitating an increase in the volume of sales of such supplier is ex facie erroneous and contrary to the fundamental tenets of GST law: HCIsrael claims 900 militants killed in Rafah since May monthGST - Order expressly records that personal hearing notice was returned with endorsement 'no such person at address' - Since petitioner has shifted to a new premises, it is just and necessary to provide an opportunity to contest demand: HC116 die in stampede at UP ’Satsang’I-T- Application for revision of order dismissed in limine on grounds of delay; case remanded for re-consideration: HCWe are deepening economic ties with India, says US officialI-T- As per Section 119(2)(b), power to condone applications relate to claims for amount exceeding Rs 50 lakhs are to be considered by CBDT; however it is impermissible for CBDT to pass order on merits: HC8 Dutch engineers build world’s longest bicycle - 180 feet, 11 inchesI-T- Additions framed u/s 68 for unexplained income & u/s 69 for unexplained expenditure not tenable where complete transactional details are furnished & not doubted: HCRailways earns Rs 14798 Crore from Freight loading in June monthI-T- Delay in filing ITR is per se insufficient reason to estimate assessee's profit @15% on turnover, more so where audited financial report is filed in timely manner: ITATMoD inks MoU to set up testing facilities in Unmanned Aerial System in TN Defence Industrial CorridorI-T- For invoking section 69A, assessee should be found to be owner of any money, bullion, jewellery or other valuable article & which is not recorded in the books of account: ITATGovt proposes Guidelines for ethical approach to Coal MiningI-T- TDS credit can be allowed based on AIS, where details pertaining to TDS, advance tax & other payments are reflected in Form 26AS: ITATVaishnaw to inaugurate Global IndiaAI Summit 2024I-T- Lending money with the primary intention of earning interest can be considered a business activity, but nature and manner of lending, as well as the frequency, should be taken into account: ITAT
 
GST rates for Job work - Mystery unravelled

 

OCTOBER 09, 2019

By G Natarajan, Advocate, Swamy Associates

EVERSINCE, S.No. 26 of Notification 11/2017 Central Taxes (Rate) Dt. 28.06.2017 has been amended vide Notification 20/2019 Central Taxes (Rate) dt. 30.09.2019, there has been a confusion about the rate of GST applicable for certain job work activities. The confusion is due to the fact that there are two residual entries, viz., (id) and (iv) attracting 12 % and 18 % respectively.

In order to understand the issue, it is relevant to refer to the series of amendments made to this entry over a period of time.

It may be noted that while clause (i) and the entries thereunder, viz., (a), (b), (c), (d), (da), (e), (ea), (f), (g), (h), (i), (ia), (ib), (ic) and (id) starts with "Services by way of job work in relation to", S.No. (ii) starts with " Services by way of any treatment or process on goods belong to another person in relation to ". It may be noted that some entries under clause (i) and (ii) are common, for example "Printing of Newspaper" falls under both (i) and (ii).

It may be observed from the above that the coverage of S.No. 26 (i) and 26 (ii) are clearly demarcated. So, in order to understand the difference, we have to refer to the definition of the term "job work" as per Section 2 (68) of the CGST Act, 2017 which reads as,

"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;

It may be noted from the above that any treatment or process undertaken by a person on goods belonging to another person would become "job work" only if the another person is a "registered person". The same activity, if undertaken for an unregistered person, would not amount to "job work".

The rate of GST prescribed under clause (i) of S.No. 26 of Notification 11/2017-CTR, as amended by Notification 20/2019-CTR, would apply if the activity amounts to "job work", i.e. when undertaken for a registered person. The rate of GST prescribed under Clause (ii) and (iv) would apply, when the activity is undertaken for any person other than a registered person. Clause (iii) would apply to both.

Hence, the residual entry under S.No. 26 (i)(id) would apply, if any treatment or process is undertaken by a person on goods belonging to another registered person and would attract 6 % CGST + 6 % SGST; if the same treatment or process is undertaken by a person on goods belonging to another unregistered person it shall attract 9 % CGST + 9 % SGST, under S.No. 26 (iv).

The above rates are tabulated below for ready reference.

Treatment or process undertaken by a person on goods belonging to "another registered person", i.e Job work.
Treatment or process undertaken by a person on goods belonging to "another person", i.e where the principal is unregistered person
S.No.
Description
Rate of CGST
S.No.
Description
Rate of CGST
26 (i)(a)
Job work in relation to Printing of newspapers.
2.5 %
26 (ii) (a)
Printing of newspapers
2.5 %
26 (i) (b)
Job work in relation to Textile and textile products, falling under Chapters 50 to 63.
2.5 %
26 (ii) (b)
Printing of books, journals and periodicals
2.5 %
26 (i) (c)
Job work in relation to all products falling under Chapter 71
2.5 %
26 (ii) (c)
Printing of all goods falling under Chapter 48 or 49, attracting 2.5 % CGST
2.5 %
26 (i) (d)
Job work in relation to Printing of books, journals and periodicals.
2.5 %
26 (iia)
In relation to all goods falling under Chapter 48 or 49, attracting 6 % CGST
6%
26 (i)(da)
Job work in relation to Printing of all goods falling under Chapter 48 or 49, which attract CGST 2.5 % or NIL.
2.5 %
     
26 (i) (e)
Job work in relation to processing of hides, skins and leather falling under Chapter 41
2.5 %
     
26 (i) (ea)
Job work in relation to manufacture of leather goods or footwear falling under chapter 42 or 64.
2.5 %
     
26 (i) (f)
Job work in relation to all food and food products falling under Chapters 1 to 22.
2.5 %
     
26 (i) (g)
Job work in relation to all products falling under Chapter 23, except dog and cat food put up for retail sale, falling under chapter 2309 1000.
2.5 %
     
26 (i) (h)
Job work in relation to manufacture of clay bricks falling under Chapter 6901 0010
2.5 %
     
26 (i) (i)
Job work in relation to manufacture of handicrafts goods (as defined)
2.5 %
     
26 (ia)
Job work in relation to manufacture of (a) umbrellas and (b) printing of all goods falling under chapter 48 or 49 attracting CGST @ 6 %
       
26 (ib)
Job work in relation to diamonds falling under Chapter 71
0.75 %
     
26 (ic)
Job work in relation to bus body building
9 %
     
26 (id)
Job work which is not covered above, i.e. if undertaken for registered persons
6 %
     
26 (iii)
Tailoring Services
2.5 %
26 (iii)
Tailoring Services
2.5 %
     
26 (iv)
Not covered by (i), (ia), (ib), (ic), (id), (ii), (iia) and (iii)
9 %

To put it in nutshell,

Job work undertaken for Registered Persons –

-  wherever specific rate (CGST 2.5 %) is prescribed, the same shall apply.

-  If the activity is not covered under any of the specific entry, 6 % CGST would apply.

Job work undertaken for unregistered persons.

-  wherever specific rate (CGST 2.5 %) is prescribed, the same shall apply.

-  wherever specific rate (CGST 6 %) is prescribed, the same shall apply.

-  If the activity is not covered under any of the specific entry, 9 % CGST would apply.

Tailoring, in all cases would attract only 2.5 % CGST.

Same rate of SGST also would apply.

(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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Sub: vindicated

The view expressed in this article has been vindicated vide CBIC Circular No. 126/45/2019 Dt. 22.11.2019.

To quote,
3. Job work has been defined in CGST Act as under.
“Job work means any treatment or processing undertaken by a person on goods belonging to another registered person and the expression ‘job worker’ shall be construed accordingly.”
4. 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-Central Tax (Rate) 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.

Natarajan


Posted by jaikumar seetharaman
 

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