Rates of Tax on Job Work wef from 01st October, 2019
Difference between Entry 26(id) and 26(iv) of Notification No. 11/2017-CTR
On 30th September 2019, CBIC had issued a Notification No. 20/2019-Central Tax (Rate) to give effect to Recommendations made by GST Council in its 37th Meeting held in Goa. By this Notification No. 20/2019-Central Tax (Rate), CBIC has amended Entry No. 26 and inserted few new entries in the Notification No. 11/2017-Dated 28th June 2017 (As amended from time to time). Because of this amended there has been lot of confusion about the scope of entry no. 26(id) and 26(iv) with respect to rate of GST. The question arise is there any difference between entry No. 26(id) and 26(iv) ? How they need to be interpreted.
First we need to look the entries, which is reproduced here.
|Entry No. 26 (id)||Entry No. 26 (iv)|
|(id) Services by way of job work other than (i), (ia), (ib) and (ic) above;||[(iv) Manufacturing services on physical inputs (goods) owned by others, other than (i), (ia), (ib), (ic), (id), (ii), (iia) and (iii) above.|
|Rate of GST-12%||Rate of GST-18%|
The question arises that when an Entry No. 26 (iv) has already been given in the notification, then why the Entry No. 26 (id) has been added again.
This may be interpreted as follows:-
Kindly note both entries (entry no. 26(id) and 26(iv)) look like the same, but there is a lot of difference between these two entries.
After the carful reading of both entries, it found that the term “JOB WORK” is used for entry no. 26(id), whereas the term “ANY TREATMENT OR PROCESS ON THE GOODS RELATED TO ANOTHER PERSON” has been used for entry no. 26 (iv). We need to understand the difference between these two.
The term job work has been defined U/s 2(68) of 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 above definition it can be concluded that if treatment or process undertaken by a person on goods belonging to another registered person then it shall come under definition job work but if treatment or process undertaken by a person on goods belonging to another unregistered person then it shall not come with the definition of job work.
Therefore entry no 26 (id) is restricted only in cases where in any treatment or process is undertaken by a person on goods belonging to another registered person and entry no. 26 (iv) is restricted to any treatment or process carried out on goods belonging to an unregistered person.
“Word manufacturing has nothing to do with rate of GST for job work under these two entries”
So, these two entries might seem a “Look a like” but there is a clear distinction between these two entries.
(Views are strictly personal)