Job work and Notification 20/2019 dated 1-10-2019

Job work and Notification 20/2019 dated 1-10-2019

Earlier, Excise and service tax always fights in deciding whether particular transaction is Manufacture or Whether its service Intention of GST introduction was to Reduce litigation on deciding this..

On 1-7-17 GST came.. And everywhere in Act, schedules, notification, rate schedule, classification.. … GST law says that we have bifurcate into two..
1. Goods 2 services

Fine!!

Lets talk abt Job work..
schedule clarifies specifically that Job work itself is “Service”
So as to avoid confusion

Till now it was ok.
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1-10-19 notification 20/2019 came with surprise.

If anyone have no idea what this notification says then pl read first

Read original notification of rates of services 11/2017 ( rate) dated 28-6-2017… Heading 9988.. Entry 26
And then read
20/2019 ( rate) dated 1-10-19….heading 9988..new entries added in Entry 26..

Entry no. 26(iv) is not removed.. So job work amounting to manufacture, today stands at 18 %
and newly added 26( id) says those job work not amounting to manufacture is at 12..
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Now we have to decide and divide into two
A. Job work amounting to Manufacturing.. ( this will be taxed at 18%)

B. Job work not amounting to Manufacturing ( this will be taxed at 12%)

( and this decision may differ person to person)
Isn’t this is weird??we are back to classification loop….
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Pl advise to your clients accordingly who are mainly in job work processing…