Manufacturing & converting of plain polyester films into dyed & laminated are in the nature of job work services: Maharashtra AAR
Maharashtra AAR: Services of manufacturing & converting of plain polyester films into dyed & laminated on job-work basis supplied by the applicant are in the nature of job work services
In re M/s Garware Industries Limited(AAR Maharashtra); NO.GST-ARA- 107/2019-20/B-73; 11.10.2021
The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 by an applicant seeking an advance ruling in respect of the following question:
Whether as per Notification no. 20/2019 dated 30.09.2019, services provided by Garware Industries Ltd. falls under clause (id) heading 9988?
- Applicant having GST registration is engaged in processing and conversion of Plain Polyester Film into processed all types of polyester films , GIL, an associate company of Garware Polyester Ltd. (herein referred as GPL) is covered by section 40(2) (b) of the Income Tax Act, 1961.
- GPL is a GST registered flagship company of the Garware Group and manufactures and sells all types of Polyester films. GPL sends plain polyester films along with all other required input (collectively referred to as ‘inputs’) to GIL for manufacturing/converting of plain polyester films into dyed/laminated/TS Films on Job-work basis and also send base film/TPU films for manufacturing of PPF films and TPU films as raw materials.
- In accordance with the Job Work Agreement, the title to the plain polyester film or any other inputs will vest with GPL. During the treatment/work on the Plain Polyester Films provided by GPL, the basic characteristics of the product are not lost. It is just a different commercial product.
Discussions and Findings:
- The basic issue before this authority was whether the activity carried out by the applicant as per the agreement with M/s Garware Polyester Limited (GPL) amounts to job work and if yes, whether the said activity falls under clause (id) heading 9988 of notification no. 20/2019 dated 30.09.2019.
- From the submissions made by teh applicant it appears as under;-
i. The process is undertaken by a person i.e. the applicant;
ii. The process is undertaken on goods belonging to another person who is registered under the GST Act;
iii. Only job charges in the form of processing charges are received by the applicant.
iv. The goods after processing are returned back within one year.
v. No new product emerges after the process is carried out by teh applicant on the goods which belong to GPL.
vi. The applicant receives only job charges from GPL for teh services rendered.
- Since no new product comes into existence after the process conducted by the applicant on the raw materials supplied by GPL, therefore the process undertaken will come under the purview of job work as defined under section 2(68) of teh GST Act, 2017. Thus, in view of the above it was found that teh applicant is only a job worker, carries out processes on goods i.e. Polyester Films supplied by teh principal i.e.GPL.
- It was found that the services provided by the applicant does not fall under (i),(ia),(ib),(ic) of te above mentioned notification. It was already found that the impugned services supplied by the applicant are in the nature of jobwork. It was further found that the said services do not fall under entries at items (i),(ia), (ib) and (ic) above.
- Therefore it was found that the subject supply of services will be covered by the residuary entry at item (id) of teh said notification, namely, Services by way of job work other than (i), (ia), (ib) and (ic) above.
The impugned services supplied by the applicant to GPL are in the nature of job work services, classifiable under Entry at item (id) under heading 9988 of notification no. 11/2017- Central Tax Rate dated 28.06.2017 as amended.
Therefore, the impugned services provided by applicant falls under clause (id) heading 9988.
To Read the Ruling Download PDF Given Below: