• twitter-icon
Unlimited Tax Return Filing


Gujarat AAR: Job Work Done on Goods Held by Other Taxpayers is Subject to 12% GST

Gujarat GST AAR's Order for Shree Avani Pharma

In the case of Shree Avani Pharma [Advance Ruling No. GUJ/GAAR/R/2023/32 dated November 03, 2023], the AAR, Gujarat, ruled that the job work services offered by the applicant fall under Sr. No. 26(id) of Notification No. 11/2017-Center Tax (Rate) dated June 28, 2017. The services are classified under Heading SAC 9988, making the applicant liable to pay GST at a rate of 12 per cent.

Key Details of the Case of Shree Avani Pharma

Shree Avani Pharma, a partnership business, offers job work for using raw materials to convert them into finished products on behalf of GST-registered clients. During the job work process, the clients retain ownership of the goods.

The applicant sought clarification on whether their job work services fall within the scope of Sr. No. 26 of Notification No. 11/2017-CE (Rate) dated June 28, 2017, as amended by Notification No. 20/2017-CT(Rate) dated September 30, 2019, and Heading SAC 9988. They also inquired about the applicable GST rate, which is 12 per cent (6 per cent CGST and 6 per cent SGST).

The Matter

Is the applicability of a 12% GST rate on the job work performed on goods owned by other registered individuals under GST accurate?

Gujarat GST AAR Judgement

The AAR, Gujarat, in Advance Ruling No. GUJ/GAAR/R/2023/32, made the following determinations:

  • The heading 9988 pertains to services of manufacturing on physical inputs (goods) owned by others, as defined in Section 2(68) of the Central Goods and Services Tax Act, 2017.
  • Based on a joint reading of the Notification and Circular No. 126/45/2019-GST dated November 23, 2019, Sr. No. 26(id) of the Notification applies when job work is performed on goods owned by another verified individual. On the other hand, Sr. No. 26(iv) includes job work provided on goods about unregistered individuals.
  • Consequently, the AAR ruled that the job work services offered by the applicant fall under Sr. No. 26(id) of the Notification and Heading SAC 9988. As a result, the applicant is accountable for paying GST at a rate of 12%.
Applicant NameShree Avani Pharma
GSTIN of the applicant24ABTFS4354F1ZW
Date03.11.2023
ApplicantManish Patel
Gujarat GST AARRead Order

Disclaimer:- "All the information given is from credible and authentic resources and has been published after moderation. Any change in detail or information other than fact must be considered a human error. The blog we write is to provide updated information. You can raise any query on matters related to blog content. Also, note that we don’t provide any type of consultancy so we are sorry for being unable to reply to consultancy queries. Also, we do mention that our replies are solely on a practical basis and we advise you to cross verify with professional authorities for a fact check."

Published by Arpit Kulshrestha
Arpit Kulshrestha seeks higher interests in financial services, taxation, GST, I-T, etc. Writes articles with depth knowledge and is extensive for the same. The resources provide effective articles for the products of SAG infotech which provides taxation and IT software. Writing from observations and researching makes his articles virtuous. View more posts
SAGINFOTECH PRODUCTS

Leave a comment

Your email address will not be published. Required fields are marked *

Follow Us on Google News

Google News

Latest Posts

New Offer for Professionals

Super Tax Offer

Upto 20% Off
Tax, ROC/MCA, XBRL, Payroll, Online GST

Limited Offer, Hurry

Big Offer for Tax Experts

Upto 20% Discount on Tax Software

    Select Product*

    Current GST Due Dates