TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Authority classifies applicant's services as job work under GST Act, eligible for reduced 6% rate.</h1> <h3>In Re: M/s. Fine Electro Coating</h3> In Re: M/s. Fine Electro Coating - TMI Issues Involved:1. Classification of the process as a service and determination of whether it qualifies as job work.2. Applicability of Notification No. 20/2019-Central Tax (Rate) regarding the reduced GST rate on job work.Issue-wise Detailed Analysis:1. Classification of the Process as a Service and Determination of Whether it Qualifies as Job Work:The applicant, M/s. Fine Electro Coating, is engaged in CED Coating and Powder Coating services, receiving products from customers and processing them through Phosphating Treatment followed by either CED or Powder Coating. The applicant argued that their activities should be classified as job work under Section 2(68) of the CGST Act, 2017, which defines job work as any treatment or process undertaken by a person on goods belonging to another registered person.The Authority examined the nature of the processes undertaken by the applicant, noting that Phosphating Treatment is a chemical treatment that does not result in a new product but prepares the surface for subsequent coating. The process increases the lifespan of the parts without changing their basic characteristics, thus not resulting in the emergence of a new product. The Authority concluded that the applicant's activities do not constitute manufacturing as defined under Section 2(72) of the GST Act, 2017, but are indeed job work since they involve processing goods belonging to another registered person without creating a new product.The Authority further emphasized that the goods are received under a delivery challan and returned to the principal after processing, with the applicant only receiving job charges. This aligns with the conditions specified in Section 143(1)(a) of the CGST Act, 2017, which mandates the return of goods to the principal within one year after job work.2. Applicability of Notification No. 20/2019-Central Tax (Rate) Regarding the Reduced GST Rate on Job Work:The applicant sought clarity on whether the reduced GST rate of 6% for job work services, as per Notification No. 20/2019-Central Tax (Rate) dated 30th September 2019, applies to their services. The Authority analyzed the relevant provisions of Notification No. 11/2017-Central Tax Rate dated 28.06.2017, and its amendments, particularly the entry at item (id) under heading 9988, which covers job work services not falling under specific categories listed in items (i), (ia), (ib), and (ic).The Authority found that the applicant's services do not fall under the specified categories but are covered by the residuary entry at item (id), which includes job work services other than those explicitly mentioned. Therefore, the reduced GST rate of 6% as per Notification No. 20/2019-Central Tax (Rate) is applicable to the applicant's job work services.Conclusion:The Authority ruled affirmatively on both questions raised by the applicant. The process followed by the applicant is treated as a service and qualifies as job work under the GST Act. Consequently, the reduced GST rate of 6% as per Notification No. 20/2019-Central Tax (Rate) is applicable to the applicant's job work services.
TaxTMI 
TaxTMI 
