Case Law Details
In re Sheen Electroplaters Private Limited (GST AAR Karnataka)
What is the GST Rate applicable for Job work service?
The applicant in into provision of various electro plating services on the goods received under delivery challan from their customers and returns the goods after doing the needful. The applicant purchases various raw material for provision of their output service. The applicant contends that their service is in the nature of job work and attract GST rate of 12% in terms of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended by Notification 20/2019 Central Tax (Rate) dated 30-09-2019,. The applicant also contends that Circular No. 126/45/2019-GST prescribes 12% GST rate for all services by way of job work under the entry at item (id) under heading 9988 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 inserted with effect from 01-10-2019.
In view of the above the core issue before us to decide is whether the job work services provided by the applicant are covered under clause (id) or clause (iv) of entry number 26 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended by Notification 20/2019 Central Tax (Rate) dated 30-09-2019, effective from 01.10.2019, for the heading 9988 and also the rate of GST applicable thereon. In this regard we invite reference to para 4 of the Circular No. 126/45/2019-GST issued by the CBIC, wherein it is communicated as under:-
“there is clear demarcation between 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 . Entry at item (id) covers only job work services as defined in Section 2 (68) of CGST Act, 2017, that is, services by way of treatment or processing undertaken by a person on goods belonging to another registered person. On the other hand, the entry at item (iv) specifically excludes the services covered by entry at item (id), and therefore, covers only such services which are carried out on physical inputs (goods) which are owned by persons other than those registered under the CGST Act”.
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