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

GST classification of jewellery repair: service or job work status determines whether job-work concessions apply or standard service rates apply.
Classification determines GST: repair of customer-owned jewellery is principally described as Maintenance and Repair Services (HSN/SAC 9987 / 998722) attracting the rate specified in Entry 25(ii) of Notification No. 11/2017, while the concessional job-work treatment applies only where the activity is bona fide job work performed on inputs belonging to a registered person as defined and supported by applicable circular guidance; if the transaction is a composite supply with goods as the principal element, the principal supply's rate governs.