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Issues: (i) Whether the process of job work undertaken on tea supplied by a foreign principal was taxable under GST and liable to tax at 18%; (ii) whether the place of supply of the service was in Andhra Pradesh so that CGST and SGST applied instead of IGST; (iii) whether the service was exempt under Notification No. 25/2012 dated 20.06.2012.
Issue (i): Whether the process of job work undertaken on tea supplied by a foreign principal was taxable under GST and liable to tax at 18%.
Analysis: Job work was treated as a service on goods belonging to another person, and the activity of super critical fluid extraction on tea supplied by the foreign principal was held to fall within manufacturing services on physical inputs owned by others under the relevant GST classification. The service was considered taxable under the GST regime and liable at the rate applicable to the specified entry.
Conclusion: The activity was held taxable under GST and liable to tax at 18%.
Issue (ii): Whether the place of supply of the service was in Andhra Pradesh so that CGST and SGST applied instead of IGST.
Analysis: Since the goods were physically made available by the foreign principal and the service was actually performed at the applicant's business premises, the place of supply was determined under the provision governing services in respect of goods physically made available to the supplier. The place of supply was therefore the location where the service was performed in Andhra Pradesh.
Conclusion: The place of supply was held to be Andhra Pradesh, and CGST and SGST were held applicable.
Issue (iii): Whether the service was exempt under Notification No. 25/2012 dated 20.06.2012.
Analysis: The service tax regime had been subsumed into GST, and the cited mega exemption notification was therefore treated as no longer applicable to the transaction under GST.
Conclusion: The exemption under Notification No. 25/2012 dated 20.06.2012 was held inapplicable.
Final Conclusion: The ruling confirmed that the applicant's job work service to the foreign principal was taxable under GST, that the place of supply was in Andhra Pradesh, and that the cited service tax exemption notification did not apply.
Ratio Decidendi: Job work on goods physically made available by a foreign recipient is taxable as a GST service, and where the service is actually performed in India the place of supply is the place of performance, making the domestic GST levy applicable.
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