GST Leviable by Job Worker - Engineering Industry

[A SenthilKumaran]

Dear Sir,

We have outsourced the steel MS/SS raw material to cut through lazer cutting machines on various sizes based on the drawings to our job worker which is parts of our manufacturing final product by us. My query is in this case our job worker has to charge weather 12% GST or 18% GST. In this case the material sent by us and they are only providing the lazer cutting services.

[KASTURI SETHI]

The issue is debatable. Some experts are of the view that if the activity amounts to manufacture GST @18% is applicable otherwise GST is applicable @12%. In the absence of the definition of the term, 'manufacturing service' in CGST Act, the situation is fluid. The phrase, 'manufacturing service' should be defined.

I have already explained my views in detail in this forum in October, 2019.

[YAGAY andSUN]

What is the end use of MS/SS raw material at your end, which are duly being cut by the job worker through lazer cutting machine.

[YAGAY andSUN]

In our view, rate of GST should be 18% as it is being used in your finished/final products.

AI Summary

Debate over GST Rate for Laser Cutting Services on Steel: Is It 12% or 18% Due to Definition Ambiguity? A participant inquired about the applicable GST rate for laser cutting services provided by a job worker on steel materials, which are part of their final manufacturing product. The question was whether the GST should be 12% or 18%. One respondent noted that the issue is debatable due to the absence of a clear definition of 'manufacturing service' in the CGST Act, suggesting that if the activity is considered manufacturing, an 18% GST applies. Another respondent argued for an 18% GST rate, as the cut materials are used in the final product.