Kerala AAR holds that the materials like carpets, coir, etc. supplied by the principal for executing job works along with moulds in required designs are covered under Chapter 50 to 63 of Customs Tariff Act, 1975; Therefore, job-work services on such goods squarely come under Sl. No. 26(i)(b) of Notification No. 11/2017-Central Tax (Rate), taxable at 5% GST.
Facts: M/s. Irene Rubbers (“the applicant”) is a job worker engaged in the production of rubber backed and rubber edged coir mats and polypropylene mats of various designs and size as required by the principal on the materials provided by the principal.
Issues Involved: 1. Whether the process and treatment carried out on the goods belonging to the principal and made available by the principal amount to the job work? 2. Whether the activity of job work carried out on goods falling under chapter heading 5702 and 5703 is liable to GST at the rate of 5% under Entry No.26(i) (b), Notification No. 11/2017-CT (R) dated June 28, 2017?
Held: The Hon’ble AAR, Kerala vide Advance Ruling No. KER/45/2019 dated April 12, 2019 held that manufacturing services on physical inputs owned by the principal is treated as services by the way of job work and is covered under SAC 9988. Further the material like carpet, coir etc. are supplied by the principal for execution job work along with mould in the required designs. All the raw material supplied by the principal are covered under chapter 50 to 63 of the customs Tariff Act, 1975. Therefore, Job work services applied on such goods squarely come under Sl.No. 26(i) (b), Notification No.11/2017-CT(R) dated June 28, 2017 and taxable @5% GST.
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