TaxTMI 
TaxTMI 
TaxTMI 
2021 (1) TMI 648
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....tification, point (i)(d)contains that the rate of job work where the process does not amount to any manufacture will attract rate of SGST and CGST of 6% each. The extract of Notification No.11/2017-CGST Rate and Notification No.20/2019-CGST rate are re-produced hereunder: Sr.No. Chapter, Section or Heading Description of Service Rate (percent) Condition 26. Heading 9988(Manufacturing services on physical inputs (goods) owned by others) (i) Services by way of job work in relation to- (a) Printing of newspapers; (b) Textile yarns (other than of man-made fibres) and textile fabrics; (c) Cut and polished diamonds; precious and semi-precious stones; or plain and studded jewellery of gold and other precious metals, falling under Chapter 71 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975); (d) Printing of books (including Braille books), journals and periodicals; (e) Processing of hides, skins and leather falling under Chapter 41 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975). Explanation.- "man made fibres" means staple fibres and filaments of organic polymers produced by manufacturing processes either,- (a) by polymerisation of organic....
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....he 3rd Schedule of CETA involves packing or repacking of such goods in a unit container or labelling or relabelling of containers including declaration or alteration or alteration of retail sale price on it or adoption of any other treatment on the goods to tender the product marketable to the consumer. 4. The applicant has quoted various judgements/circular which gives the definition of manufacture as under: (a) In a landmark case of UOI vs. Delhi Cloth and General Mills Co.ltd., (1977 (1) E.L.T.(J199) (S.C.), it was held that manufacture is 'bringing into existence of a new substance known to market' and that merely applying the process to a substance would not amount to manufacture if there is nothing new and marketable created. The definition was further refined in later decisions to clarify that excisable goods are required to be capable of being bought and sold and even if there is a tariff entry provided under Central Excise Tariff Act, 1985, it would first need to pass the test of manufacture. The second test of marketability became the indivisible criterion to attract excise duty liability. (b) In the case of UOI vs. JG Glass (1988 (97) E.L.T. 5 (S.C.)), while determi....
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....r carbon and in these techniques, ions of the metal to be plated must be periodically replenished in the bath as they are drawn out of the solution; that the most common form of electroplating is used for creating coins, such as US pennies, which are made of zinc covered in a layer of copper; that in Layman's language, we can say that the electroplating will put a coating on a part, hence this process will not result in any product with distinct name or character nor does it change the characteristics of the product and hence does not amount to manufacture. 6. The applicant has further submitted that with respect to the Circular No.126/45/2019 issued on 22.11.2019, clarification has been given by CBIC with respect to GST rate on SAC code of job work and as per the circular, they understand that where there is job work done as per section 2(68) of CGST Act, where the process is done by the assessee of the material provided by other registered persons, the GST rate applicable will be 12% and where process is done by the assessee on the material provided by unregistered person, the rate of GST will be 18%; that through this demarcation, they understand the rate applicability as under....
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....erned party with their coating on the parts and in such process neither a new product is generated nor is the product with new distinct name being generated i.e. it only enhances the durability of the material to some extent. 10. To begin with, we need to find out the correct classification of services of Electroplating surface coating/electroless nickel plating rendered by the applicant as well as the liabilility of GST on the said services and also to confirm whether the services provided by the applicant are indeed covered under Heading 9988 as stated by them, for which we will be required to refer to Notification No.11/2017-Central Tax(Rate) dated 28.06.2017 which covers the chapter, section and sub-heading of services under GST. We have gone through the said notification and find that Entry No.26 of the said notification pertains to Heading No.9988 (Manufacturing services on physical inputs (goods) owned by others) and contains services supplied/provided by way of jobwork and reads as under: Sr.No. Chapter, Section or Heading Description of Service Rate (percent) Condition 26. Heading 9988 (Manufacturing services on physical inputs (goods) owned by others) (i) Servic....
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.... Notes of the First Schedule shall apply to the interpretation of heading 9988. Further, it is also seen that the "Manufacturing services on physical inputs (goods) owned by others, other than (i) above" falls at entry of item(ii) and the GST liability on the same is 18% (9% SGST + 9% CGST). We find that the aforementioned Notification has been amended vide Notification No.20/2017-Central Tax(Rate) dated 22.08.2017 wherein the major amendment is the shifting of 'Manufacturing services on physical inputs (goods) owned by others' from item(ii) to item(iii). The amendments made vide above notification in respect of Entry No.26 of Notification No.11/2017-Central Tax(Rate) dated 28.06.2017 is detailed hereunder: "(vi) against serial number 26,- (a) in column (3), in item (i),- (A) for sub-item (b), the following sub-item shall be substituted, namely:- "(b) Textiles and textile products falling under Chapter 50 to 63 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975);"; (B) the Explanation shall be omitted; (b) for item (ii) in column (3) and the entries relating thereto in columns (3), (4) and (5), the following shall be substituted, namely:- (3) (4) (5) "(ii) ....
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....printing of all goods falling under Chapter 48 or Chapter 49 which attract CGST @ 6per cent. 6 --- (vii) in item (iii), for the word, brackets and figures "and (ii)" the figures, brackets, letters and word ", (ia), (ii) and (iia)" shall be substituted;" 10.3 Notification No.11/2017-Central Tax(Rate) dated 28.06.2017 has been further amended vide Notification No. 46/2017-Central Tax(Rate) dated 14.11.2017, wherein the following amendments have been made in respect of Entry No.26 of the said Notification: "(iii)against serial number 26, in column (3), in item (i), after sub-item (h), the following shall be inserted, namely: - '(i) manufacture of handicraft goods. Explanation. - The expression "handicraft goods" shall have the same meaning as assigned to it in the notification No. 32/2017 -Central Tax, dated the 15th September, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 1158 (E), dated the 15th September, 2017 as amended from time to time.' 10.4 Notification No.11/2017-Central Tax(Rate) dated 28.06.2017 has been further amended vide Notification No.01/2018-Central Tax(Rate) dated 25.01.2018, wherein the ma....
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....75 (51of 1975);" (c) all products other than diamonds, falling under Chapter 71 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975);"; (d) Printing of books (including Braille books), journals and periodicals; (da) printing of all goods falling under Chapter 48 or 49, which attract CGST @ 2.5per cent. or Nil; (e) Processing of hides, skins and leather falling under Chapter 41 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975). (ea) manufacture of leather goods or foot wear falling under Chapter 42 or 64 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975) respectively;"; (f) all food and food products falling under Chapters 1 to 22 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975); (g) all products falling under Chapter 23 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975), except dog and cat food put up for retail sale falling under tariff item 23091000 of the said Chapter; (h) manufacture of clay bricks falling under tariff item 69010010 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975);" (i) manufacture of handicraft goods. Explanation. - The expression "handicraft goods" shall hav....
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.... above, the question of the applicant seeking advance ruling, should correctly read as under: " Whether the service supplied by the applicant would fall under (id) or (iv) of Entry No.26 of Notification No.11/2017-Central Tax(Rate) dated 28.06.2017 as amended and what would be the rate of GST applicable?" 12. Next, we are required to find out what Electroplating surface coating and Electroless nickel plating means. Since the definition of these terms are not available in the CGST Act, 2017, we will be required to refer to the definition of these terms as per dictionary. As per Dictionary.com: (a) "Electroplating surface coating is the process of coating the surface of a conducting material with a metal. During the process, the surface to be covered acts as a cathode in an electrolytic cell, and the metal that is to cover it acts as an anode." (b) "Electroless nickel plating is a process that co-deposits a nickel-phosphorous alloy without need for an externally applied electrical current. 12.1 On going through the above definitions, it appears that the aforementioned processes results in the formation of a coating on the materials/metals on which it is carried out. Also, as ....
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.... owned by others, other than (i), (ia),(ib), (ic), (id), (ii), (iia) and (iii) above. 12.3 We also find that the applicant has time and again stated in his submission that the services provided by them does not amount to manufacture as it does not result in the emergence of a commodity having different name, character and use. The applicant have also quoted a few judgements and a circular to support their contention and have stated that the services provided by them are job work only and does not amount to manufacture and would therefore be covered under item(id) of Entry No.26 of Notification No.11/2017-Central Tax(Rate) dated 28.06.2017(as amended) and not under item(iv) of the said entry. Here, we would like to mention that there is no denying the fact that the procedure followed by the applicant is that of job work only and that there is a general entry available at item(id) of Entry No.26 of above said notification with effect from 01.10.2019. We also fully agree with the view of the applicant that the service provided by the applicant does not amount to manufacture, but the word mentioned in item(iv) of aforementioned entry is 'manufacturing services' and not 'manufacture'. ....
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....t put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. ((b) mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as the criterion is applicable. (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration." 12.4 On going through the above, we feel that entry at item(iv) of Sr.No.26 of Notification No.11/2017-Central Tax(Rate) dated 28.06.2017 (as amended) provides the most specific description to the services provided by the applicant as compared to the general description provided at item(id) of the said entry. We therefore conclude that the services of electroplating surface coating and electroless nickel plating provided by the applicant are classifiable under item....