Job Work involving Conversion of Raw Materials Owned by other Registered Dealers attracts 12% GST: AAR [Read Order]
Registered Dealers – AAR – GST – Job Work – taxscan
Registered Dealers – AAR – GST – Job Work – taxscan
The Gujarat Authority for Advance Ruling (AAR) observed that the job work involving conversion of raw materials owned by other registered dealers attracts 12% GST.
The applicant, Shree Avani Pharma, is a partnership firm and is engaged in the job work of converting raw material [inputs owned by others] viz [i] Nitroantraquinone (HSN 2909); (ii) Monon methyl Amine (HSN 2921)& (iii) Bromine (HSN 2801) into Antraquinone derivatives (HSN 2914). The conversion is done by the appellant for their client M/s. Profile Bio-Chemical Pvt Ltd., who is registered under GST. The applicant has further stated that they undertake job work only for clients registered with GST; that during the job work, ownership of the goods does not change i. e. remains with its client.
The process involves mixing dry/powdered raw materials with water, heating at high temperatures, adding liquid Bromine, centrifugation, distillation, filtration, chilling, and separation by centrifugation to obtain the final product in dry/powder form.
The applicant contended that their job work service falls under SAC 9988 and sought clarification on whether their service falls within entry Sr. No. 26(id) of Notification No. 11/2017-CT (Rate) dated 28.6.2017, as amended vide Notification No. 20/2017-CT (Rate) dated 30.9.2019. The applicant questions whether their service, classified under SAC 9988, attracts GST at the rate of 12% (CGST 6% + SGST 6%) or otherwise.
The applicant has stated that they are carrying out the processing for their client M/s. Profile Bio-Chemical Pvt Ltd., who is registered under GST and that during the course of job work, ownership of the goods does not change and remains with its client.
A Two-Member Bench of the Authority comprising Riddhesh Raval, Member SGST and Amit Kumar Mishra, Member CGST observed that “The service in question falls within the ambit of entry Sr. No. 26(id) of notification No. 11/2017-CT (Rate) dated 28.6.2017, as amended vide notification No. 20/2017-CT (Rate) dated 30.9.2019; the service would be classified under SAC 9988 ; and it will attract GST @ 12% [CGST 6% + SGST 6%].”
To Read the full text of the Order CLICK HERE
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