As per recommendation of the GST council to reduce the rate of GST on Job work charges to 12% , which was 18% earlier, in the Notification No 11/2017 –Central Tax (Rate) dtd 28-06-2017 and entry was inserted w.e.f. 01-10-2019.
There were confusions amongst the taxpayers with regard to entries at items (id) & (iv) under heading 9988.
It has been clarified now that :
Entry at item (id) covers only job work services as defined in section 2 (68) of CGST Act, 2017, that is, services by way of treatment or processing undertaken by a person on goods belonging to another registered person – The GST Rate on the same is 12%
Entry at item (iv) specifically excludes the services covered by entry at item (id), and therefore, covers only such services which are carried out on physical inputs (goods) which are owned by persons other than those registered under the CGST Act.- The GST Rate on the same is 18%
A Circular (Circular No. 126/45/2019-GST) dtd 22nd Nov 2019 was issued in this regard and the same is reproduced below