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The process providing job work service to the foreign principal, in the premises of the applicant as per the specifications of the recipient of services, is taxable under GST

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Levy of GST — Authority for Advance Ruling — Job Work from Foreign Principal – The applicant are engaged in Job work of removing “Caffeine” from Tea powder imported from foreign Principal and exporting the de-caffeinated tea to his Principal. The applicant sought an advance ruling on the process of job work i.e., importing the goods i.e., Green Tea/black tea powders from his Principal and under taking process of super critical fluid extraction. The material is being supplied by his Principal foreign customer at free of cost and the processed output will be exported to them. The applicant sought for clarification as to (i) whether the process of providing job work service to foreign customer is taxable under GST, is such transaction attracts GST (ii) if applicable to GST, whether they have to pay IGST or SGST+CGST (iii) is the job work service provided by them is exempted from service tax under Mega exemption list as per Notification No. 25/2012 dated 20.06.20 72 and not chargeable to GST.
Held that:- The Hon’ble Authority for Advance Ruling held that the process providing job work service to the foreign principal, is taxable under the Act 2017 as per Entry No.26 (HSN Code 9988) Proviso (iv), and liable to tax @ 18%. The place of supply for this transaction, is location of the service where actually performed i.e., business premises of the applicant, which is located in the State of Andhra Pradesh. Hence the tax liability under SGST Act/CGST Act 2017 only applies. Regarding applicability of Notification No.25/2012, dated 20.06.201 2, as the Service Tax Act itself subsumed under GST, the said Notification is no more applicable.Synthite Industries [2018] 3 TAXLOK.COM 76 (AAR-AP)

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