Reshelling old sugar mill rollers classified as repair service under SAC 9987, not job work under SAC 9988.

The authority classified the reshelling of old sugar mill rollers as a repair/maintenance service under SAC 9987, not a job work service under SAC 9988. Consequently, the activity was deemed to attract the standard 18% GST rate, rather than the concessional 12% rate.

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Issues Involved:
1. Classification of the activity of reshelling of old sugar mill rollers as job work service under SAC 9988 or repair/maintenance service under SAC 9987.
2. Applicable GST rate for the activity of reshelling of old sugar mill rollers: whether 12% GST or 18% GST.

Issue-wise Detailed Analysis:

Issue 1: Classification of Reshelling Activity

Applicant's Contentions:
The applicant, M/s. S. B. Reshellers Pvt. Ltd., argued that the activity of reshelling old sugar mill rollers is a repair/maintenance service under SAC 9987. They cited precedents from the Hon'ble Supreme Court and Tribunal, which classified similar activities as repair services under the Central Excise regime. They maintained that this classification should continue under the GST regime, despite some customers suggesting it could be considered a job work service under SAC 9988 due to procedural compliance with Rule 55 and Rule 45 of the CGST Rules, 2017.

Authority's Observations and Findings:
The authority examined the nature of the reshelling process, which involves making old, worn-out sugar mill rollers reusable. It was determined that this process does not result in the manufacture of a new product but rather repairs existing products. The authority noted that job work, as defined under Section 2(68) of the CGST Act, involves processing raw materials or semi-finished goods, which was not the case here. The sugar mill rollers were already finished products that had been used and worn out. Therefore, the activity did not fit the definition of job work under SAC 9988 but was instead a repair service under SAC 9987.

Issue 2: Applicable GST Rate

Applicant's Contentions:
The applicant contended that the activity of reshelling old sugar mill rollers should continue to attract 18% GST as a repair/maintenance service under SAC 9987. They argued that the concessional 12% GST rate under Sr. No. 26 of Notification No. 11/2017-CT(R) applies only to job work services classified under SAC 9988, which involves manufacturing services.

Authority's Observations and Findings:
The authority agreed with the applicant's interpretation. It was concluded that the reshelling activity is a repair service under SAC 9987 and does not qualify for the concessional 12% GST rate. Instead, it continues to attract the standard 18% GST rate applicable to repair and maintenance services.

Conclusion:
1. The activity of reshelling old sugar mill rollers is classified as a repair/maintenance service under SAC 9987.
2. The said activity will attract 18% GST, not 12%, as it does not qualify as a job work service under SAC 9988.

Order:
The authority ruled that the reshelling of old sugar mill rollers is a repair/maintenance service under SAC 9987 and will attract 18% GST.

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