GST on repair of Jewellery by Jeweller

[ROHIT GOEL]

Dear Experts,

A jeweler is providing services of repair of jewellery to end customers. It is outsourcing this work to job workers who charge it GST at 5%. Further, the jeweler is also invoicing these services to customers at 5%. Department has now raised issue that tax on these services was 18% as per Entry no. 26(iv) of NN 11/2017-CT(Rate) as 5% applies only to job work which only covers services provided by registered person to registered persons as per definition under Section 2 of CGST Act 2017.

Kindly advice correct course of action in this regard.

AI Summary

Jewelry Repair Services Should Be Taxed at 18% GST, Not 5%, Per Notification 11/2017-CT(Rate), Entry No. 26(iv) A jeweler outsourced jewelry repair services to job workers, who charged a 5% GST. The jeweler also invoiced customers at 5%, but the tax department argued that the correct rate should be 18% according to Entry No. 26(iv) of Notification 11/2017-CT(Rate), as 5% applies only to job work between registered persons. Experts in the forum discussed that jewelry repair services fall under HSN 9987, attracting an 18% GST rate. They emphasized that the 5% rate is incorrect unless it involves job work for registered persons, and the correct classification and tax rate should be determined based on the nature of the supply.