Unregistered Individuals: 18% GST Rate on Invoices Under their Name

Mentioned in Circular 126 quoted on 22 Nov 2019, under GST surveillance, the individual who is an unregistered individual will have to pay the tax with 18% GST rate on goods manufactured under his name.

Not only textile but other sectors such as jewellery, footwear, eatables, clay bricks, etc. come under the ambit of the provision. The tax rate for goods manufactured under the name of an unregistered individual is taxable at 18% which is equivalent to thrice the tax rate decided for a registered taxpayer (i.e.5%).

The provision with effect from 01-10-2019, Residuary job Work for a registered personAn informative guide to under the job work industry after GST regime in India. Also, we briefly described related transitional provisions, input tax credit, etc. Read More is taxable @ 12%. Diamonds Job work for a registered person is taxable @ 1.5%. However, the tax rate on the manufacturing of items such as newspaper/book printing and others falling under Chapter 48 and 49 will be the same for both registered as well as unregistered individuals i.e. 5%.

For Repair Process

The invoice for repair service will always display the tax with a 18% rate no matter it is carried out for the registered or non-registered individual. Other jobs that are not categorized under manufacturing may also be taxed at 18% rate.

With not much difference between job work, manufacturing and repair, these may overlap. Like job work may include manufacturing as well as non-manufacturing processes. Repair is done for the product which is defective.

Textiles Industry

Textile is a multi-layered industry generating employment for more than 40% of the population. The sector is renowned as the second-largest employer of the country. Its various stages include processes such as ginning, mercerizing, bleaching, sizing, de-sizing, dying, laundry and much more.

Notification 20/2019-CTR dated 30-09-2019

Stated by the notification 20/2019-CTR dated 30-09-2019, amendments in the tax rates for residuary job work was an uncertain provision. The change was not according to the recommendations of GST CouncilGet to know the details about GST council and how it works for GST implementation in India? We also describe its constitution, functions, quorum and decision-making. Read More dated 20-09-2019 which only stressed the change in tax rates for the engineering industry. This circular affected textile, jewelry, footwear, food products, clay bricks and so on. Concerned industries need to make a representation on the issue.

Check Out GST Circular No. 126/45/2019 by CBIC