The Karnataka Authority of Advance Ruling (AAR) ruled that 12% GST payable on job work services undertaken on the goods belonging to the registered persons.
The applicant, Sheen Electroplaters Pvt Ltd stated that they are engaged in the business of plating industry, an independent and well established industrial resource approved for electroplating and surface treatment of aerospace and non-aerospace components; they provide services of Electroless Nickel Plating, SS Passivation, Chemical Conversion Coating, Zinc Phosphating, Manganese Phosphating, Dry/Solid Film Lubrication, Powder Coating, Painting and also few other chemical processes such as Gold Plating, Silver Plating, Electrolytic Nickel Phosphorus, Nickel Plating. White Bronze Plating, Zinc Plating, Tin Plating, Copper Plating, Surface Treatments, Anodizing, SS Passivation and Chemical Conversion Coating.
The applicant further states that they provide above Job Work services, to the companies registered under GST, based on the requirements of the respective customers; the customers send components along with delivery challan for job work service; the applicant purchases required raw materials such as Gold, Silver, Copper, Nickel, Chromium, Zinc, Tin and acids like Hydrochloric acid, sulphuric acid, Nitric acid, sodium hydroxide and many other chemicals.
The applicant has sought the advance ruling on the issue in respect of GST Rate applicable for Job work service and whether it falls under entry (id) Services by way of job work other than (i), (ia), (ib) and (ic) above; 12% GST or (iv) which covers “manufacturing services on physical inputs owned by others at the rate of 18% GST.
The coram of M.P. Ravi Prasad and T. Kiran Reddy ruled that the job work services undertaken by the applicant on the goods (physical inputs) belonging to the registered persons are covered under clause (id) of entry number 26 of the Notification 11/2017-Central Tax (Rate) dated 28.06.2017, as amended and accordingly attract GST rate of 12%.
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