Irene Rubbers [2019 (24) G.S.T.L. 812 (AAR – GST – Kerala)

Manufacturing services on physical inputs owned by the principal would be treated as services by the way of job work.

Facts: 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. 

Issue: 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.

Held: The Hon’ble AAR, Kerala held that the 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 moulds 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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