GST Rate of 12% applicable on Jobwork of Cutting metallic film roll: AAR

The Gujarat Authority for Advance Ruling (GAAR) issued Advance Ruling No. GUJ/GAAAR/APR/2025/121 on June 27, 2025. This was related to an application filed by M/s. Kanika Exim, located at Plot No. PIP-7, Diamond Industrial Park, 2nd Floor, Sachin Talanagar Road, Surat, Gujarat – 394230.

Kanika Exim is registered under the GST and its GSTIN is 24AAZAK2974J1ZL. The company is specifically involved in job work services related to cutting metallic film rolls. These rolls are used for making the zari-metallic yarn, which is mostly used in sarees and textile products.

The application was filed on September 7, 2024, under Sections 97(2)(c) and 97(2)(d) of the CGST Act, 2017. Kanika Exim asked the authority for clarification on the correct GST rate applicable to their job work activity.

The company raised four main questions for the authority:

• What rate of GST applies to the job work of cutting metallic film rolls used in making zari-metallic yarn for sarees?
• Can their service qualify for the lower GST rate of 5% which is applicable to certain textile job work services, considering the direct use in the textile manufacturing process?
• If it is not taxed at 5% then should it be taxed at 12% under the GST rate for textile processing job work as per the Notification No. 20/2019-Central Tax (Rate)?
• Should this be placed under the general job work category which attracts 18% GST?

On April 8, 2025, a personal hearing was conducted where the company’s representatives Shri Tirthraj Monpara (CA), Shri Ashish Laheri (CA), and Shri Kaushik Vaholiya (Partner) attended and explained their business and the nature of their services. They also gave copies of invoices during the hearing as requested.

After that, due to the transfer of the Central Member, another personal hearing took place on May 22, 2025. Shri Ashish Laheri and Shri Kaushik Vaholiya appeared again on behalf of the applicant and repeated their submissions.