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)

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16 Comments

  1. sunil bhageria says:

    But there are different interpretation some says that in case of Job work amounting to manufacture the rate will be 18 % as defined in point no (iv) of Heading 9988. And this 12 % is applicable on other job work not amounting to manufacturing. Even in taxguru 2-3 artciles of different authors says the above.

    1. hsinghal86 says:

      There was a confusion in this regard earlier amongst the professionals, however it pretty clear now from the press release of 37th GST Council meeting and language of the notification that the GST rate on Job work is 12% irrespective of the fact that it is amounting to manufacture or not. However, in the case of job work of unregistered principals job work will continue to be 18%.

  2. Amrit pal says:

    We are a registered job worker under the tariff head 8543 and 998898.Getting all the sub assembly from a registered principal and in turn are supplying them finished goods.
    Kindly specify the job work GST
    Thanks and regards

  3. A Wilson says:

    Sir,

    Principal & Job Work both are registered and the Job Work is Manufacturing Process [ Raw-materials into New Product ]. Pls confirm the Rate 12% or 18%.

  4. Vinod Daga says:

    Whether 12% rate is applicable to all job work( registered to registered) irrespective of job work amounting to manufacture or not. As in pre GST era job work amounting to manufacture was subject to levy of excise duty and rest were subject to levy of service tax . Please clarify. Thanx

  5. Dinesh says:

    sir, what is the new Gst RATE of JOB WORKS on Iron & Steel products like CUTTING by MACHINES of Roofing Trafford sheets, Iron coils conversion to RIDGES used for joints in Tresswork. Also job works by Machines on Aluminum products conversion to plumbing products like elbows, Clambs, caps, guttor, Caps etc.

    1. hsinghal86 says:

      GST Rate will be 12% on supplies of Job work to Registered Principals and 18% in case of supplies to Unregistered Principals on both the abovementioned cases.

    1. hsinghal86 says:

      GST can not be charged in case of unregistered persons.
      RCM is also not applicable as on date on purchases from Unregistered persons.

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