GST Rate on Job Work w.e.f. 1st October 2019

CBIC has made the following changes in GST Rate in relation to Job Work vide Notification No.- 20/2019-CT (R)  Dated: 30 Sep 2019. Changes are effective from 1st October 2019.Changes in Rates are as follows:-

i) For diamond related services

• Rate of GST reduced from 5% to 1.5% on supply of job work services in relation to diamonds.

ii) For engineering related services other than bus body bldg.

• The rate of GST reduced from 18% to 12% on supply of machine job work such as in engineering industry, except supply of job work in relation to bus body building which would remain at 18%.

A Brief analysis of Job Work Rate to be Charged is as follows:-

Job Worker	Principal	GST Rate*	Remarks
Registered	Registered	12%	W.e.f. 1st Oct 2019 as per Notification No.- 20/2019- CT (R )  Dated: 30 Sep 2019
Registered	Unregistered	18%	The benefit of Notification No- 20/2019- CT (R ) not available as not covered by definition of Job work#  under GST
Unregistered	Registered/ Unregistered	NA	GST is not applicable as Job worker is not liable for registration

* Not applicable for specified services mentioned GST Tariff Heading 9988 in clause (i), (ia), (ib) and (ic)

# 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; [Sec 2(68)]

As per the above-mentioned definition, Principal shall be registered person to qualify Job Work under GST.

It is recommended to Job Workers to charge 12% GST on supplies made to Registered Principals and 18% GST on supplies made to Unregistered Principals.

(CA Hemant Singhal – ca.hsinghal@gmail.com)