In M/s Alcoats [KAR ADRG 62/2021 dated October 29, 2021] Karnataka Authority for Advance Ruling (“KAAR”) held that job work services undertaken by M/s Alcoats (“the Applicant”) by way of treatment or processing such as anodizing, plating, on the goods/materials belonging to registered person are covered under clause (id) of entry number 26 of the Notification 11/2017-Central Tax (Rate) dated June 28, 2017 as amended by Notification 20/2019-Central Tax (Rate) dated September 30, 2019 (“Service Rate Notification”) and accordingly attracts GST rate of 12%.
The Applicant has sought an advance ruling that as per entry number 26 of Service Rate Notification whether job work services of anodizing, plating on the materials sent by their customers i.e. registered persons, falls under item number (id) which attracts 12% tax rate or whether it falls under item number (iv) which attracts 18% tax rate.
The Hon’ble KAAR observed, that Central Board of Indirect Taxes and Customs (“CBIC”) has issued a clarification vide para 4 of Circular No. 126/45/2019-GST dated November 22, 2019 by making a clear demarcation between scope of the entries at item (id) and item (iv) of serial number 26 of Service Rate Notification.
Observed that, as per above-mentioned circular entry at item (id) covers only job work services as defined under Section 2(68) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) i.e. services by way of treatment or processing undertaken by a person on goods belonging to another registered person and on the other hand, entry at item (iv) specifically excludes service provided under entry (id) and includes only those services which are provided on goods owned by other than registered persons under the CGST Act.
Held that, the Applicant provides job work services on the goods belonging to registered persons and hence are covered under clause (id) of entry number 26 of Service Rate Notification and accordingly attracts GST rate at 12%.
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