GST Rate on job work

[Kaustubh Karandikar]

XYZ (Sender of the goods) and PQR (job worker) both are registered under GST. The activity carried out by PQR amounts to manufacture. PQR is required to charge 12% GST or 18%?

AI Summary

GST Rate for Job Work: PQR Should Charge 12% as Clarified by Circular, Not 18% XYZ, a sender of goods, and PQR, a job worker, both registered under GST, are involved in a manufacturing-related activity. The query is whether PQR should charge 12% or 18% GST. According to a circular and notification, PQR should charge 12% GST. Despite some initial confusion, the circular clarifies that the key criterion is whether the parties are registered under GST, not whether the process amounts to manufacturing. The forum participants agree that the circular effectively resolves any doubts regarding the applicable GST rate.