GST Rate for Job Work

[Guest]

We have a query regarding Latest GST Notification No 22 for Job Work

We are doing Job work of laser cutting of iron Sheets..

a) Sometimes we provide iron ourselves and charge cost of iron (18%) and job work separately on the invoice.

b) sometimes iron is supplied by client and we do job work only and we charge job-work on invoice..

My query is in above case whether GST rate would be 18% or 12%..

[KASTURI SETHI]

It is 12 %. Cutting does not amount to manufacture.

Manufacture - Slitting of HR/CR coils of Iron & Steel sheets not amounts to manufacture

Circular No. 811/8/2005-CX., dated 2-3-2005

Manufacture - Pickling and oiling of metals as preparatory steps not amount to manufacture

Circular No. 927/17/2010-CX., dated 24-6-2010

[KASTURI SETHI]

It is also covered under residual entry (serial no.26) of Notification No.11/17-CT(Rate) dated 28.6.17 as amended vide Notification No. 20/17-CT(Rate) dated 30.9.19 effective from 1.10.19. From both angles, it is 12%.

Also see replies against Issue ID No.115479 dated 1.10.19.

It is expected that Board may issue clarification in this context.

[Ganeshan Kalyani]

The process need to be understood. If out of the process a new product emerges then it is manufacturing process and applicable GST is 18%. And if the process does not amounts to manufacture then the rate is 12%.

[Atul Rathod]

1. Primarily it’s based on manufacturing critiria.

2. Secondary in manufacturing also they have bifurcated between registered person and unregistered person.

3. If Job work is done on goods owned by registered person- 12% (entry-26(i(id)))

4. If job is done on goods owned by unregistered person -18% (entry-26(iv)).

5. If its not amount to manufacturing: than its 18%.

The reason for bifuracation between registered and unregistered person is -terminology used in 26(i(iv)) is job work-which linked to reg person and 26(iv) is for over all linked to unresgitered as well.

AI Summary

Debate on GST Rate for Laser Cutting: 12% if No New Product, 18% if Manufacturing Involved. A discussion on the Goods and Services Tax (GST) rate applicable to job work involving laser cutting of iron sheets reveals differing opinions. One party asserts that if the process does not result in manufacturing, the GST rate is 12%, referencing circulars and notifications. Another contributor emphasizes understanding whether a new product emerges from the process; if so, the rate is 18%. Additionally, the GST rate varies based on whether the goods belong to a registered or unregistered person, with 12% for registered and 18% for unregistered owners, depending on the specific job work criteria.