RMC Job Work Taxable at 18% From 22 September 2025: Maharashtra AAR

In re Prayatna Infratech Pvt. Ltd. (GST AAR Maharashtra)

Summary: The Maharashtra Authority for Advance Ruling held that Prayatna Infratech Private Limited’s activity of preparing ready-mix concrete (RMC) from raw materials owned and supplied by Riverview City Constructions Limited (RCCL) constitutes a supply of services and qualifies as job work under Section 2(68) of the CGST Act, 2017. The activity falls under Heading 9988 and, specifically, SAC 998853, covering other non-metallic mineral product manufacturing services. The Authority ruled that GST was payable at 12% (6% CGST and 6% SGST) up to and including 21 September 2025 and at 18% (9% CGST and 9% SGST) from 22 September 2025 following the amendment of the services rate notification.

The applicant operated an automated RMC batching plant at RCCL’s Riverview City project at Loni Kalbhor, Pune. RCCL, a registered person engaged in constructing residential and non-residential buildings, supplied the principal raw materials, including cement, sand, aggregates, water and admixtures, free of cost. Ownership of these materials and the resultant RMC remained with RCCL. Prayatna provided its plant, labour and operational support and bore expenses for electricity, diesel, salaries, repairs and maintenance. The process involved precise weighing, batching, mixing and chemical treatment, followed by loading into transit mixers and primary transportation within the construction site. The output was prepared to RCCL’s specifications and supplied only to RCCL.

The applicant sought rulings on the applicable Service Accounting Code and GST rate. It argued that RMC emerged as a commercially distinct product with a separate name, character and use, satisfying the definition of manufacture in Section 2(72). It relied on excise precedents, CBIC Circular No. 237/71/96-CX dated 12 August 1996 and the Supreme Court’s decision in Larsen & Toubro Ltd. v. Commissioner of Central Excise, Hyderabad. However, because the manufacturing process was undertaken on another registered person’s goods, it submitted that the transaction was a service under paragraph 3 of Schedule II and also job work under Section 2(68). It further maintained that manufacturing and job work were not mutually exclusive concepts.

The jurisdictional officer stressed that the contractual arrangement and actual nature of supply were crucial. If the applicant sold and invoiced RMC as goods, it would not qualify as job work merely by adopting that label. Conversely, processing or job-work charges could qualify where the agreement established RCCL’s ownership of both inputs and output. In response, the applicant produced work orders and sample invoices describing the activity as “Mixing and Primary Transportation of RMC”. The work orders expressly stated that the rates were “without material”. The applicant also stated that the relevant documents had already been supplied to the officer on 15 April 2025.

After examining the application, additional submissions, work orders, invoices and the officer’s objections, the Authority found that the consideration covered only mixing and primary transportation. The invoice value did not include cement, aggregates, sand, admixtures or other principal materials. There was no sale of independently owned RMC by Prayatna and no transfer of title in goods from Prayatna to RCCL. The documents therefore adequately addressed the officer’s concern about ownership and established that the applicant rendered processing services.

The Authority accepted that making RMC resulted in manufacture, but explained that the taxable event under GST was supply. Excise jurisprudence could establish the emergence of a distinct product, yet could not override paragraph 3 of Schedule II, which treats processing another person’s goods as a supply of services. For job-work classification, the relevant requirements were a treatment or process, goods belonging to another person and that other person’s GST registration. All three were satisfied. The emergence of a new commodity did not, by itself, take the activity outside job work.

The applicant’s use of its own fuel, power and operational resources also did not change the conclusion. Referring to CBIC’s clarification in Circular No. 38/12/2018-GST dated 26 March 2018 that a job worker may use its own goods in addition to those received from the principal, the Authority treated these as facilitating inputs that did not affect RCCL’s ownership of the principal materials. It also discussed the reliance placed on Prestige Engineering (India) Ltd., JSW Energy Ltd., Prodair Air Products, Bharat Petroleum Corporation Ltd. and Inox Air Products. On classification, the explanatory notes to Heading 9988 cover outsourced manufacturing processes on physical inputs owned by others, with service fees rather than the value of manufactured goods forming the service consideration. SAC 998853 specifically includes concrete manufacturing services and was the appropriate classification.

On the pre-amendment rate, the Authority applied serial No. 26(id) of Notification No. 11/2017-Central Tax (Rate), dated 28 June 2017. It referred to Circular No. 126/45/2019-GST dated 22 November 2019, distinguishing job work on goods belonging to registered persons from the residual category of manufacturing services on others’ inputs. Since RCCL was registered and the activity qualified as job work, the residual 18% entry could not be invoked for the period before the rate amendment.

During the proceedings, the applicant brought the subsequent change in law to the Authority’s attention and requested separate rates for the two periods. The Authority accepted that this was necessary because the application concerned an ongoing supply of services. Consequently, it confirmed 12% GST up to 21 September 2025 and 18% GST from 22 September 2025 under the substituted serial No. 26 introduced by Notification No. 15/2025-Central Tax (Rate), dated 17 September 2025. The rate change did not alter the underlying finding that the activity was job work classifiable under SAC 998853.

Cases Discussed

• In re JSW Energy Limited — 2020 (35) G.S.T.L. 456 (Appellate AAR, Maharashtra). Discussed in support of job-work classification even where processing produces a different product.
• In re Prodair Air Products India (P) Ltd. — 2018 (18) G.S.T.L. 817 (AAR, Kerala). Cited concerning manufacture of industrial gases from inputs supplied by the principal.
• In re Bharat Petroleum Corporation Ltd. — 2018 (19) G.S.T.L. 119 (AAR, Kerala). Cited concerning job work involving principal-owned inputs used for manufacturing industrial gases.
• In re Inox Air Products Pvt. Ltd. — 2018 (14) G.S.T.L. 147 (AAR, Gujarat). Cited in support of treating manufacture using goods belonging to the principal as job work.
• Larsen & Toubro Ltd. v. Commissioner of Central Excise, Hyderabad — 2015 (324) E.L.T. 646 (Supreme Court). Relied upon concerning RMC as a manufactured and excisable product; the Authority separately applied the GST service-classification provisions.
• Eaton Fluid Power Ltd. v. Commissioner of Central Excise, Pune — 2014 (308) E.L.T. 602 (CESTAT, Mumbai). The applicant reproduced the Tribunal’s reasoning that emergence of a new commodity does not exclude job work.
• State of Maharashtra v. Mahalaxmi Stores — 2003 (152) E.L.T. 30 (Supreme Court). Included in the applicant’s authorities on the meaning of manufacture.
• Hawkins Cookers Limited v. Collector of Central Excise, Chandigarh — 1997 (96) E.L.T. 507 (Supreme Court). Included in the applicant’s authorities on the emergence of a distinct manufactured product.
• Indian Cable Co. Ltd. v. Collector of Central Excise, Calcutta — 1994 (74) E.L.T. 22 (Supreme Court). Cited by the applicant in its discussion of manufacture and commercial identity.
• Prestige Engineering (India) Ltd. v. Collector of Central Excise, Meerut — 1994 (73) E.L.T. 497 (Supreme Court). Relied upon in the submissions and discussed by the Authority in addressing manufacture, job work and the job worker’s own inputs.
• Ujagar Prints Etc. Etc. v. Union of India & Others — 1989 (39) E.L.T. 493 (Supreme Court). Included among the applicant’s authorities concerning manufacture.
• Mafatlal Fine Spinning & Mfg. Co. Ltd. v. Collector of Central Excise — 1989 (40) E.L.T. 218 (Supreme Court). Included among the applicant’s authorities on processes and manufacture.
• Siddeshwari Cotton Mills (P) Ltd. v. Union of India & Another — 1989 (39) E.L.T. 498 (Supreme Court). Cited by the applicant in explaining when processing amounts to manufacture.
• Sterling Foods v. State of Karnataka & Another — 1986 (26) E.L.T. 3 (Supreme Court). Cited by the applicant on the distinction between processing and manufacture.
• Empire Industries Ltd. v. Union of India — 1985 (20) E.L.T. 179 (Supreme Court). Cited by the applicant concerning the meaning of manufacture.
• Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Pio Food Packers — 1980 (6) E.L.T. 343 (Supreme Court). Cited by the applicant concerning the emergence of a commercially distinct article.
• South Bihar Sugar Mills Ltd. v. Union of India — 1978 (2) E.L.T. J 336 (Supreme Court). Included in the applicant’s authorities concerning manufacture.
• Union of India v. Delhi Cloth and General Mills Co. Ltd. — 1977 (1) E.L.T. (J199) (Supreme Court). Cited by the applicant concerning transformation into a commercially distinct article.