Job Work under GST- Advance Ruling Compilation | LogiTax

Job Work under GST- Advance Ruling Compilation

18-04-2024

GST

Mrudula Joshi

As per section 2(68) of the CGST Act, 2017, "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. As per section 143 of the CGST Act, 2017, a registered person may send any inputs or capital goods, without payment of tax, to a job worker for job work. However, there are certain conditions to be fulfilled to do so. They are as follows:

A) Bring back inputs, after completion of job work or otherwise, or capital goods, within one year and three years, respectively, of their being sent out, to any of his places of business.

B) Supply such inputs, after completion of job work or otherwise, or capital goods, within one year and three years, respectively, of their being sent out from the place of business of a job worker.

However, GST is charged by the job worker on his job work charges to be recovered from the principal. Following are the GST rates applicable for job work:

Sr No.	Particulars	HSN	GST Rate
1.	Carrying out an intermediate production process as job work in relation to the cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fiber, fuel, raw material, or other similar products or agricultural produce	9986	Nil
2.	Services by way of job work in relation to (a) Printing of newspapers; (b) Textiles and textile products falling under Chapters 50 to 63 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975) (c) all products [other than diamonds]108 falling under Chapter 71 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975); (d) Printing of books (including Braille books), journals and periodicals; (da) printing of all goods falling under Chapter 48 or 49, which attract IGST å percent. or Nil; (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; (i) manufacture of handicraft goods.	9988	5%
3.	Services by way of job work in relation to (a) manufacture of umbrella; (b) printing of all goods falling under Chapter 48 or 49, which attract IGST å12 percent.	9988	12%
4.	Services by way of job work in relation to diamonds falling under chapter 71 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975);	9988	1.5%
5.	Services by way of job work in relation to bus bodybuilding; “Explanation- For the purposes of this entry, the term “bus body building” shall include the building of body on the chassis of any vehicle falling under chapter 87 in the First Schedule to the Customs Tariff Act, 1975	9988	18%
6.	Services by way of job work in relation to the manufacture of alcoholic liquor for human consumption	9988	18%
7.	Services by way of job work other than above	9988	12%

There are plenty of Advance Rulings on Job work and GST implications thereon. We have compiled it for you!

Sr No.	Name of the applicant	Order Date	State	Ruling
1.	OERLIKON FRICTION SYSTEM (INDIA) PRIVATE LIMITED	29/11/2023	Tamil Nadu	Classification of activity of binding the carbon friction strips on metal components (i.e. Synchronizer Core) received from the customer, under job work challan- Whether the activity undertaken by the Applicant amounts to supply of job-work service under the SAC code 9988? The activity undertaken by the Applicant of Bonding imported Carbon friction strips to Synchronizer core received from customers amounts to the supply of job work services under SAC 9988.
2.	DHAMRA LNG TERMINAL PRIVATE LIMITED	05/09/2023	Orissa	Classification of activity of re-gasification of Liquified Natural Gas (LNG) into Re-gasified Liquefied Natural Gas (RLNG) - Whether the proving conversion of re-gasification of LNG owned by customers into RLNG amount to rendering of service by way of job work? In terms of Circular No. 126/45/2019-GST dated 22.11.2019 applicant’s activity of re-gasification of LNG owned by its GST registered customers amounts to rendering of service by way of Job Work and covered by Heading 9988 at Sl. No. 26 of Notification No. 11/2017-CT (rate) dated 28.06.2017, as amended, and as such is liable to 12% GST.
3.	SHREE AVANI PHARMA	03/11/2023	Gujarat	Whether the process of converting the inputs viz. Nitroantraquinone (HSN 2909), Monon methyl Amine (HSN 2921) & Bromine (HSN 2801) into Antraquinone derivatives (HSN 2914) amounts to ‘services by way of job work’ and classifiable under SAC 9988 attracting 12% GST? The service in question falls within the ambit of entry Sr. No. 26(id) of notification No. 11/2017-CT (Rate) dated 28.6.2017, as amended vide notification No. 20/2019-CT (Rate) dated 30.9.2019 and is classifiable under SAC 9988 and will attract 12% GST.
4.	NATANI PRECAST	22/03/2023	Rajasthan	Manufacture and supply Precast Manholes - Whether the supply of precast manholes using the steel and cement supplied by the principal is a supply of service or a supply of goods? Whether the stated supply to be made by the applicant constitute any form of job work? The Precast Manholes and Rises are movable property, hence supply of Precast Manholes and Rises is the supply of goods and not a supply of services. The manufacturing activities carried out by the applicant do not fall under the ambit of job work as it involves the manufacturing of Precast Manholes and Rises and it cannot be termed as "any treatment or process undertaken by a person on goods belonging to another registered person".
5.	PURVANCHAL VIDYUT VITRAN NIGAM LIMITED	03/02/2023	Punjab	The activity of Bodybuilding on chassis owned and supplied by the customer - The applicant is engaged in tipper bodybuilding and fabrication and mounting the same on the Chassis supplied by the customers - Whether the activity of building and fabricating of Tipper Body and mounting the same by the applicant on the chassis owned and supplied by the customer will result in the supply of goods or supply of services? If the activity of fabrication of the Tipper Body and mounting of the body is done on the chassis owned by the applicant and using his own inputs and capital goods, the same shall amount to a supply of goods and shall merit classification under HSN 8707, attracting 28% of GST. However, if the activity of fabrication of the Tipper Body and mounting of the body is done on the chassis supplied by the customer using their own inputs and capital goods amounts to the supply of service, in terms of CBIC Circular dated 09.08.2018 and merits classification under SAC 9988 (Job work), attracting 18% of GST.

Conclusion :

Taxpayers should analyze provisions of the GST Act and Rules and also check various advance rulings on the subject to understand the exact taxability of the service with job work.