23 November 2019
we are registered under CGST Act since 01-07-2017 against CGST Authority and providing Electroplating and Nickel Platting services where we receives the goods from the party and we make process on the same and then we return the same goods to concern party. In such process, neither new product is generated noris the product with new distinct name and market not being generated. There is confusion weatherour service will fall under (id) or Sr no ii of the list. With our humble belief, our service will fall under (id) Services by way of job work other than (i) (ia) (ib) (ic) above. The reason of our belief is as follows. 1. Point (ii) covers manufacturing services on physical inputs (goods) owned by others, other than (i) above. The definition of manufacturing services are not defined in CGST Act. However, the “manufacturing” word has been passed through various jurisprudent pronouncement and various tests in erstwhile law. As per section 2(f) of Central Excise Act, 1994, manufacture includes any process i) Incidental or ancillary to the completion of manufactured product And ii) Which is specified in relation to any goods in the section or chapter notes of the 1st Schedule to the Cenral Excise Tariff Act, 1985 (CETA), as amounting to manufacture (deemed manufacture) OR iii) Which in relation to the goods specified 3rd Shedcule of CETA involves packing or repacking of such goods in a unit container or labeling or relabeling 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. Circular 927/17/2010-CX dated 24-June-2010 in its point no 3 clearly indicates that ….. 3. For a process to amount to manufacture under Section 2f of the Central Excise Act, 1944, the process undertaken should result in emergence of commodity having different name, character and use. Since in the present case no new product emerges as a result of the process of pickling it will not amount to manufacture….. By reading of above circular and jurisdiction pronouncement it is clear that the activity or process can be manufacture only when it produce different name, character and use. 2. Definition of Job work: As per section 2(68),Job work means any treatment or process undertaken by a person on goods belonging to another registered person and the expression “job worker” shall be construed accordingly. 3. Electroplating Service: Definition of Electroplating Service is not provided in GST Act. As per Wikipedia:” Electroplating is a process that uses an electric current to reduce dissolved metal cations so that they form a thin coherent metal coating on an electrode. The term is also used for electrical oxidation of anions on to a solid substrate, as in the formation of silver chloride on silver wire to make silver/silver-chloride electrodes. Electroplating is primarily used to change the surface properties of an object (such as abrasion and wear resistance, corrosion protection, lubricity, aesthetic qualities), but may also be used to build up thickness on undersized parts or to form objects by electroforming” Here, In Lehman language, we can say that the electroplating will put a coating on an electrode. Hence, this process will not result in any product with distinct name of characteristics. It does not change and characteristics of the product. And hence, it does not amount to manufacture. With the above discussion and reasons we believe that the process will be job work process which does not amount to manufacture and hence, it will be levied at 6% under (id) of 26 Sr no. of Notification. Here, In Lehman language, we can say that the electroplating will put a coating on an electrode. Hence, this process will not result in any product with distinct name of characteristics. It does not change and characteristics of the product. And hence, it does not amount to manufacture. With the above discussion and reasons we believe that the process will be job work process which does not amount to manufacture and hence, it will be levied at 6% under (id) of 26 Sr no. of Notification. Here, In Lehman language, we can say that the electroplating will put a coating on an electrode. Hence, this process will not result in any product with distinct name of characteristics. It does not change and characteristics of the product. And hence, it does not amount to manufacture. Here, In Lehman language, we can say that the electroplating will put a coating on an electrode. Hence, this process will not result in any product with distinct name of characteristics. It does not change and characteristics of the product. And hence, it does not amount to manufacture.
With the above discussion and reasons we believe that the process will be job work process which does not amount to manufacture and hence, it will be levied at 6% under (id) of 26 Sr no. of Notification.
With the above discussion and reasons we believe that the process will be job work process which does not amount to manufacture and hence, it will be levied at 6% under (id) of 26 Sr no. of Notification.
Here, In Lehman language, we can say that the electroplating will put a coating on an electrode. Hence, this process will not result in any product with distinct name of characteristics. It does not change and characteristics of the product. And hence, it does not amount to manufacture. With the above discussion and reasons we believe that the process will be job work process which does not amount to manufacture and hence, it will be levied at 6% under (id) of 26 Sr no. of Notification.
25 November 2019
Service by way of job work to registered person attracts GST Rate @ 12% as per S. No. i(d). It is important to note that the term job work also includes the manufacturing services in its ambit as well. Because the definition of job work as per GST law is much wider than as provided in the erstwhile Excise Law. Only condition for job work is that the said services are performed for registered person under GST law. As the facility of job work under GST law is extended to Registered person only. (Refer section 2(68) of CGST Act).
Thus, in case job work services (i.e. which may result into or not into manufacturing services) are provided to registered person than GST Rate is 12% and in case provided to un-registered person than GST rate is 18%.
Board has recently clarified this preposition vide Circular No. 126/45/2019-GST dated 22.11.2019
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