GST Rate of 5% Applicable on Job Work For Processing Of “Barley” Into “Malted Barley”

The Central Board of Indirect Taxes and Customs (CBIC) has issued clarification that 5% GST is applicable on job work for processing of “barley” into “malted barley”.

The Board has offered clarification about the GST Council’s recommendations on the GST levy made at its 52nd meeting on October 7, 2023, in New Delhi.

The question was whether job work for processing “Barley” into “Malted Barley” is subject to 5% GST as it is for “job work in relation to food and food products” or 18% GST as it is for “job work in relation to the manufacture of alcoholic liquor for human consumption.”

References have been received to clarify whether job work for the conversion of barley into malt attracts GST at the 5% prescribed rate for “job work in relation to all food and food products falling under Chapter 1 to 22 of the customs tariff” or at the 18% prescribed rate for “job work in relation to the manufacture of alcoholic liquor for human consumption.”

Malt is a type of food. It can be ingested directly as part of meal preparations or used as an ingredient in food products. It is also utilised in the production of beer and alcoholic liquor for human consumption. Regardless of end-use, the conversion of barley into malt is considered work in the food industry.

The Board clarified that job work services related to malt manufacturing are covered by Sl. No. 26 (i) (f), which covers “job work in relation to all food and food products falling under chapters 1 to 22 of the customs tariff” regardless of the end use of that malt and attracts 5% GST.

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