Just a moment...
Are you sure you want to delete your reply beginning with '' ?
Are you sure you want to delete your Issue titled: '' ?
All Issues
of 
Sir,
Please clarify the current rate of GST for following category of job work
9988 Manufacturing services on physical inputs (goods) owned by others
99889 Other manufacturing services
998898 Other manufacturing services n.e.c.
Thanks & Regards
Abdul Razack
of 
Sir,
Please refer to Sl. No. 26 (ii) of Notification No. 11/2017-Central Tax (Rate) for services. The rate specified is 9% CGST + 9% SGST. This rate is applicable to (i) 9988- Manufacturing services on physical inputs (goods) owned by others, (ii) 99889-Other manufacturing services and (iii) 998898-Other manufacturing services n.e.c.
Sir,
Thank you for your reply, actually i am asking about as per new notification dated 30.09.2019, what is the GST rate for Job work charges for Service Code 9988
Thanks & Regards
Abdul Razack
.jpg){kind=small}
9988 -Manufacturing services on physical inputs (goods) owned by others : It is job work. (service). It has sub-headings
99889-Other manufacturing services 12% (6%+6%)*
998899 -Other manufacturing services n.e.c. 12 % (6%+6%) *
* Which is not specifically mentioned will attract GST rate @12% and others i.e. Job-work in relation to bus body building will attract 18%, Diamond 0.75 %, goods belonging to Ch.48 or 49 will attract 6% etc.
Thank You sir
Dear Sir,
as per my view, gst rate is as under :
9988 (i) - 5%
9988 (ii) - 18%
9998-Other Domestic Services - 18%.
W.e.f. 1.10.19, if job-work process amounts to manufacture, rate of tax is 18% and if job-work process does not amount to manufacture, rate of GST is 12%. For example; powder-coating does not amount to manufacture, it will attract 12%. The job-work processes like machining, casting etc. amounts to manufacture, hence this job-work will attract GST @18%.
So registered person has to differentiate/identify what job-work amounts to manufacture and what does not amount to manufacture. Very tedious indeed. Here the definition of 'manufacture', 'manufacturing process' provided in Section 2(f) of Central Excise Act can help which is as follows:-
Section 2(f) of Central Excise Act
[(f) “manufacture” includes any process, -
(i) incidental or ancillary to the completion of a manufactured product;
(ii) which is specified in relation to any goods in the Section or Chapter notes of [the Fourth Schedule] as amounting to [manufacture; or]
[(iii) which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer,]
and the word “manufacturer” shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account;]
[(f) “manufacture” includes any process, -
(i) incidental or ancillary to the completion of a manufactured product;
(ii) which is specified in relation to any goods in the Section or Chapter notes of [the Fourth Schedule] as amounting to [manufacture; or]
[(iii) which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer,]
and the word “manufacturer” shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account;]
Sir,
The definition of Job-work is defined at Section 2(68) of CGST Act,2017 and is as below:-
"(68) “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."
Now, “manufacture” of goods is settled by Hon’ble Supreme Court in various decisions, few are listed below
- To levy Central Excise duty, it is necessary that a new article should come into existence as a result of manufacturing activity – Hawkins Cooker Ltd. Vs. Collector – 1997 (96) ELT 507 (S.C.) = 1996 (12) TMI 77 - SUPREME COURT
- Incidental or ancillary process must be an integral and inextricable part of production or manufacture resulting in presenting a ‘finished’ or ‘manufactured’ product bearing a distinct name – U.O.I vs. Keshedeo Shivprasad – 2002 (145) ELT A163 (SC) = 1998 (2) TMI 609 - SUPREME COURT
- Manufacturing process continues till article is put in suitable packaging in which it is marketed – J.K.Synthetics Ltd. Vs. Collector- 1998 (97) ELT 310 (Tri.) = 1997 (3) TMI 250 - CEGAT, NEW DELHI
Hope this will help in the matter.
Thanks,
With Regards
Yes, the residual entry is made at two clause. 12% would be applicable if the process does not amounts to manufacture and 18% would be applicable if the process amount to manufacture. Thus a retook in to the process by the tax payers is necessary. The change is with effect from 01.10.2019.
I have one doubt in "KASTURI SETHI" Sir's reply.
Sir, as per your example "powder-coating does not amount to manufacture", but as per Section 2(f) of Central Excise Act, "manufacture" includes any process, - i) incidental or ancillary to the completion of a manufactured product;
So that, if the Powder-coating has done for completion of a final product, does it amount to manufacture?
Dear Irudaya Raja,
The reply given by Sh. Kasturiji Sir, is perfectly correct, as the definition of erstwhile law was reproduced. The doubt raised by you is settled by Hon’ble Supreme Court in case of Keshedeo Shivprasad, cited above.
Thanks,
Just sharing illustrations.
Powder coating neither changes character nor functioning of the goods. It is a cosmetic exercise.It has only aesthetic value. For example ; if we mix tea in the milk, it will change the character and functioning of milk and a new product (beverage-tea) is emerged. Similarly, Curd, paneer, ghee etc. are manufactured from milk by different processes. Similarly, sugar is manufactured from sugarcane. Jaggery is manufactured from sugarcane. Character and functioning of sugarcane is changed by various processes.
If any job-work process changes the character and functioning of any goods, it will amount to manufacture, otherwise not.
Sir ji
U r talking about powder coating but one of my client has work of electroplating so he will be also covered under reduced tax rate of 12 % ?
I understand that electroplaring amounts to manufacture and therefore 12% would be applicable under 26(i)(id) if it is done for registered person and at 18% if the same is done for unregistered person under 26(iv)
Dear sir
How did u get to know that it amounts to manufacture ? I think its not.
CESTAT Banglore has held that electroplating amounting to manufacture. The Department has not accepted this decision and has filed an appeal with the Supreme Court which is still pending decision.Go through this :
(1) Manufacture - Activity of electroplating goods with silver or gold whether amount to manufacture?
(2) Business Auxiliary Service - Activity of electroplating goods with silver or gold on job work basis and supplying same to EOU whether leviable to Service Tax?
(3) Exemption - Goods supplied to EOU after subjecting to electroplating on job work basis whether eligible to exemption under Notification No. 8/2005-S.T.?
The Supreme Court Bench comprising Hon’ble Mr. Justice J. Chelameswar and Hon’ble Mr. Justice S. Abdul Nazeer on 27-2-2017 after condoning the delay admitted the Civil Appeal No. 3835 of 2015 filed by Commissioner of Service Tax, Bangalore against the CESTAT Final Order No. 25247/2013, dated 3-4-2013 as reported in 2014 (33) S.T.R. 56 (Tri.-Bang.) = 2013 (5) TMI 451 - CESTAT BANGALORE (Interplex Electronics India Pvt. Ltd. v. Commissioner). While admitting the appeal, the Supreme Court passed the following order :
“Delay condoned.
Appeal admitted.
List the appeal in normal course.”
The Appellate Tribunal in its impugned order had held that the activity of electroplating of goods with silver or gold on job work basis amounts to manufacture, hence the assessee are not liable to pay Service Tax in view of specific exclusion in the definition of Business Auxiliary Service. Since the goods had been supplied to 100% EOU who is eligible for unconditional exemption under Notification No. 24/2003-C.E., the assessee has a case for eligibility for exemption under Notification No. 8/2005-S.T. even if it is assumed that the process does not amount to manufacture.
[Commissioner v. Interplex Electronics India Pvt. Ltd. - 2018 (13) G.S.T.L. J184 (S.C.)]
Thank u so much sir ji.
Sir,
I have one doubt, what is 'Consolidated_notification'?,
Is it meant both of 'UTT(R)' & 'CGST(R)'?
sir
one of my client is engaged in Adhesive coating business. He receive the various types of bolts from automobile industry for adhesive coating on them, he purchase the adhesives from other sate and do the coating process on the bolts received from the principal. The cost of adhesive comes around 50% of his invoice value.
His cutomers argue with him that this process ( coating process) comes under Job work with 12% GST only.
But we have doubt whether it should be taxed @18 % GST based on the following,
1.The adhesive is not supplied by the principal it is purchased by us.
2.The coating enhance the product torue quality
kindly confirm whether we can charge GST @18%, if yes what should be the HSN/SAC
Sh.Ramkumar Ji,
Pl. post your query independently under new Issue ID as this Issue ID has gone too lengthy. You will get comprehensive reply in this forum by tonight.
of 
TaxTMI 
TaxTMI 
TaxTMI 