Case Law Details
In re M/s. Industrial Engineering Corporation (GST AAR Kerala)
i) What will be the rate of tax under GST applicable to the professional / job works charges to be paid by the applicant in this case as explained above?
The rate of GST applicable is 18% as per Sl No. 26 (iv) – Manufacturing services on physical inputs (goods) owed by others, other than (i), (ia), (ii), (iia) and (iii) above of Notification No. 11/2017 Central Tax (Rate) dated 28,06.2017.
ii) Is there any restriction in GST laws to supply raw materials to the job work unit and get the finished goods to the applicant from the job work unit as per the required design and supervision of the engineers of the applicant and what will be the rate of tax under GST law for the above works chargeable by the service provider?
As per Section 143 of the CGST/SGST Act, 2017; the registered principal may, without payment of tax, send inputs or capital goods to a job worker for job work and, if required, from there subsequently to another job worker and so on. Subsequently, on completion of the job work, the principal shall either bring back the goods to his place of business or supply the same directly from the place of business / premises of the job worker within one year in case of inputs or within three years in case of capital goods. The rate of GST applicable is the same as that mentioned supra.
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Is there any implication if job worker returns the scrap to the principle and the principle sells it directly ?