The Karnataka Authority of Advance Ruling (AAR) ruled that 12% GST is applicable on Job work of Thermal spray/metal or metal alloy coating on goods belonging to another person if the principal is registered.
The applicant, M/s Spraymet Surface Technologies (Pvt.) Ltd. is engaged in the business of different types of thermal spray or metal coating using metal powders, carbide powders, wires rods for various engineering applications. They also offer coatings of pure metal alloys which include plasma spray, HVOF spray, powder flame spray, wire flame spray.
The stages involved in the said process are receipt of the material from the client with proper Delivery Challan along with the PO/Work Order with the required job specification, Performance of the required job on the material received from the client and Despatch of the material back to the client.
The applicant has sought advance ruling in respect of the question whether the activity of the applicant is in the nature of Job work, as defined under Section 2 (68) of CGST Act, 2017 and whether Notification No.20/2019-Central Tax (Rate) dated 30.09.2019 is applicable on them.
The coram consisting of Dr. M.P.Ravi Prasad and Mashood Ur Rehman Farooqui ruled that the job work undertaken by the applicant gets covered under item (id) of SL.No.26 of Notification No. 11/2017- Central Tax (Rate) dated June 28, 2017, in case the owner of the goods (Principal) is registered under CGST and attract 12% GST and if the principal is unregistered the impugned job work gets covered under item (iv) of SL.No.26 of Notification No. 11/2017- Central Tax (Rate) dated June 28, 2017, and attracts 18% GST.
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