The Authority for Advance Ruling (AAR), Tamilnadu bench has recently held that the electroplating is a supply of service, 18% of GST is applicable for goods belonging to an unregistered person and 12% of GST respectively after October 2019.
The Applicant is a partnership firm (M/s. Electroplating and Metal Finishers) Industrial Estate, located at Tamil Nadu and is registered under GST with GSTIN 33AABFE5239NlZC. They are one of the electroplaters in Chennai and doing Zinc Platting for their customers in Automobile, General Engineering, and Electrical & Electronic Industries.
The applicant has sought for an Advance Ruling to confirm the Rate of Tax on GST for the nature of the job (platting done on customer material as per customer specification) done by the applicant.
The applicant has stated that they receive the job from their customers against the delivery challan. On receipt of the job they do acid cleaning on the same and as per the customer specification, they are doing the platting on the job, on completion of platting the job will be checked by their quality department and returned to the customer against their invoice. With respect to their platting process, they are using ‘Zinc Anode/Hydrochloric Acid/Zinc Brighter/Zinc Additive/Caustic Soda.
The applicant was extended an opportunity to be heard in person and was heard. The partners of the applicant firm appeared for the hearing. They stated that they are doing job work of electroplating. They submitted a copy of the manufacturing process and stated that goods are received by delivery challan and they raise an invoice on the services rendered.
They added that they will submit input invoices, delivery challan (inward) e-way bill(inward), outward invoices, outward (e-way bill), detailed manufacturing process, specifications, order copy given by the principal. They stated that they are seeking clarification on the eligibility of Notification.
The Coram comprising of Additional Commissioner, Manasa Gangotri Kata and Joint Commissioner, Thiru Kurinji Selvaan delivered the order based on an application filed by Electroplating And Metal Finishers.
Section 2(68) of the CGST Act defines as “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.
The authority observed that the applicant is a registered person and when he undertakes electroplating activities on the goods belonging to another registered person, then the nature of the work of the applicant is Job work.
The authority further said that the activity of electroplating undertaken by the applicant is ‘Supply of service’ and for the period from 01.lO.2OI9, The goods are belonging to another Registered person, the applicable rate of tax is 6% CGST and 6% SGST as amended and the goods belonging to an unregistered person, the applicable rate of tax is 9% CGST and 9% SGST as amended.
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