Chilli Grinding Job Work GST Issue Left Undecided Due to Withdrawal of AAR Application

In re BD Patil Enterprises (GST AAR Karnataka)

M/s BD Patil Enterprises filed an application before the Karnataka Authority for Advance Ruling seeking clarification on the GST classification and applicable tax rate for job work services involving the grinding of dry chilli into chilli powder, where the raw material was supplied by customers. The applicant sought a ruling on whether such services would be classifiable under SAC Code 9988, Serial No. 26(f).

Subsequently, the applicant submitted a letter dated 17.03.2026 requesting withdrawal of the advance ruling application. The applicant stated that GST demand orders had been issued for the financial years 2020-21, 2021-22, and 2022-23, alleging that chilli powder grinding job work services were taxable at 18% GST instead of 5%. The applicant had already filed an appeal against the order for 2020-21 before the Joint Commissioner (Appeals) and had also responded to the demand orders for subsequent years by furnishing relevant records and explanations.

FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING KARNATAKA

M/s BD Patil Enterprises (herein after referred to as Applicantl, # 211, GUMMANAHALLI ROAD, BYADGI, Haveri, Karnataka, 581106, having GSTIN 29AAJFB7735Q1ZL, have filed an application for Advance Ruling under Section 97 of CGST Act, 2017 read with Rule 104 of CGST Rules, 2017 and Section 97 of KGST Act, 2017 read with Rule 104 of KGST Rules, 2017, in form GST ARA-01 discharging the fee of Rs.5,000/- each under the CGST Act, KGST Act.

2. The Applicant is engaged in providing job work services in relation to grinding of chilli into chilli powder, wherein the raw material is supplied by the customer. In view of the foregoing, the Applicant has sought an advance ruling on the following question:

a) Job work charges for grinding of Dry chili into chili powder. Where material is provided by the customer and we provide grinding Job work Service. Classified GST under SAC Code 9988 Serial No.26 (f).

3. However, the applicant vide letter dated 17.03.2026 submitted for withdrawal of application for Advance Ruling stating the following reasons, as below:-

“We would like to withdraw our application for advance ruling filed. We received the GST order for the year 2020-21 demand GST on chilli powder grinding Job work Service at the rate of 18% instead of 5% GST as per the notification and amendment notification.

We filed an appeal before the JC Appeal on the same order, and we receive two more demand order on the same matter for the year 2021-22 and 2022­23. We submitted all the relevant records and explanation before the appellate authority. So, we expected positive in our case, and we expect to complete the appeal proceedings at the earliest. Hence, we need to withdraw our application for Advance Ruling.”

4. In view of the above, we pass the following,

RULING

The application filed by the applicant for advance ruling is disposed off as withdrawn.