Crystal Sugar Grinding activity on contractual basis

[Guest]

Sir,

1.I am Grinding Crystal Sugar for clients on contractual basis. Crystal Sugar is supplied by clients and is ground and bulk packed by me. Ground Sugar (Pulverized Sugar) is then transported back to client. I get paid for my Job work. What will be SAC Code for this activity and percentage of GST.

2.The Freight for finished good (in this case pulverized sugar) that I transport to the client is paid by me. What is the GST percentage on transportation and how do I raise the Tax Invoice for the same. Am I eligible for ITC in this case and how.

Regards.

Murtaza

[Himansu Sekhar]

Sir

first make sure that your clients are registered.

If registered then it will be a job work.

[Himansu Sekhar]

In my view SAC CODE 9988 .GST rate 12%as it is not manufacturing services

[KASTURI SETHI]

Dear Sir, Why not 5% , it being a food item ? Specific rate is available.

[KASTURI SETHI]

Dear Querist, You have mentionef , "I transport the job-worked goods to the premises of client". Are you using your own truck for transportation of goods to the premises of the client ? In case you are paying the freight to GTA, the person who bears freight will pay GST and take ITC.

[KASTURI SETHI]

Pulverised sugar is classified under Chapter/Heading No.1701. Hence job-work is covered under Heading No.9988 at serial no.26(i)(f) (All food and food products falling under Chapters 1 to 22 in the First Schedule to the Customs Tariff Act, 1975) attracting GST 5% vide Notification No.11/17-CT(R) dated 28.6.17 as amended up to 26.3.2020.

[Himansu Sekhar]

Yes, you are correct sir. I withdraw

[KASTURI SETHI]

Sh. Himansu Sekhar Ji,

Thanks a lot, Sir. I never hesitate to learn from young person (knowledgeable) like you. On this forum we reinforce each other and thus we gain knowledge in the field of GST which is still in its infancy.GST laws are anew for all so everybody takes to understand these laws. I always try to be fool-proof but if any mistake is committed by me unknowingly. I take no time to correct myself. This is also in the interest of the visitors of this forum/TMI.

AI Summary

Job work on client supplied sugar attracts concessional GST rate and transport GST follows the freight bearer. Grinding crystal sugar supplied by clients and returning pulverized sugar is job work; the principal must be GST-registered. Pulverised sugar is in Chapter 1701 and job-work for food products under heading 9988 (serial no.26(i)(f)) attracts GST at 5% per the relevant notification. If freight for returning goods is paid to a GTA, the party bearing the freight pays GST on transport and may claim ITC subject to ITC eligibility; invoices should reflect the nature of supply and who bears freight.