CBIC issued a clarification on Job work vide circular No. 126/45/2019- GST on the dated 22nd November 2019. Before published, these circular people have many doubts about job work and manufacturing processes.

We are clearing our views before and after issued this clarification by CBIC.

Before Clarification After Clarification
Per notification No. 11 dated June 28, 2017, S. no. 26,  details of GST rates to be charged on manufacturing services on physical inputs (goods) owned by others have been provided. The notification has been amended by notification no. 20/ 2019 dated September 30th, 2019. The combined notifications now read as under:

GST on manufacturing services on physical inputs (goods) owned by others: 

(id) Services by way of job work other than specific entry: CGST @ 6%

(iv) Manufacturing services on physical inputs (goods) owned by others other than specifically specified: CGST @ 9%

Per 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 the circular issued by CBIC, a Registered person is a clear demarcation between the 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.

As Per the above notification, Job work services (other than specified specifically), will be subjected to GST @12% (except service considered as manufacturing services which are liable @ 18%).


On the above basis, if any service provided by way of treatment or processing undertaken by a person on goods belonging to another registered person will be considered under the Job work service and liable @ 12%.
People had a view that if any service provided on goods owned by others and the service not considered as manufacturing services (not changed the name, character, and use of the goods) liable @ 12%. It means any service provided to Non registered person by way of treatment or processing will be covered under manufacturing service and liable @ 18%.

Conclusion: – If any service provided to the registered person. It will cover under Job work service, and if it provides to an unregistered person, It will cover under manufacturing service.

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  1. Mamatha says:

    we come under GST rules (iv) Manufacturing services on physical inputs(goods) owned by others, other than (i), (ia), (ii), (iia) and (iii) that is NATURE OF SERVICES, OTHER FABRICATED METAL PRODUCT MANUFACTURING AND METAL TREATMENT SERVICES (i.e. Aluminum Anodizing, Painting, Pasivation like. ) – SAC 998873 . kindly let us know GST 12% or 18% applicable for the above process

    1. V.SHUNMUGARAJAN says:

      While doing job work on raw materials supplied by registered dealer, what will be rate of tax when resultant product will come under another chapter heading. For eg. input comes under chapter 72 and end product comes under chapter 73.

      1. shubhamg272 says:

        If you are providing a job work service then 12% rate will be applicable. it will not affect that the final product is the same or not.

  2. kamini sharma says:

    we provide heat treatment services at chemical plants and cement factories, usually the job is done at customers premises, what is the rate of gst to be charged by us, -12% or 18%

    1. shubhamg272 says:

      If any service provided at the location of service recipient then it will not be considered as job work, will be considered as manpower supply and liable @ 18%

    1. shubhamg272 says:

      If you are providing labour services at the location of the recipient, then you are required to charge 18% and if it relates to the location of service provider then you can charge 12% subjected to definition of job services.

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January 2021