Activity of thermal spray / metal or metal alloy coating on the goods / material belonging to another person amounts to job work and is a supply of services.
Classification of supply— In the instant case, the applicant is into the business of different types of thermal spray or metal coating on materials supplied by the Principal using metal powders, carbide powders, wires rods for various engineering applications.
Thus the applicant has sought advance ruling in respect of the following question:-
Whether the activity of the applicant is in the nature of Job work, as defined under Section 2 (68) of CGST Act, 2017 and whether Notification No.20/2019-Central Tax (Rate) dated 30.09.2019 is applicable on them?
Held that— The activity of the applicant is in the nature of job work covered under SAC 998873 and Notification No.20/2019-Central Tax (Rate) dated 30.09.2019 is applicable to the applicant.
The applicable rate of tax depends on the aspect whether the principal (owner of the goods on which job work is done) is registered under CGST/KGST Act 2017 or not.
If Principal is registered the impugned job work attracts 12% GST in terms of item (id) of SL.No.26 of Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 and if the principal is not registered the impugned job work attracts 18% GST item (iv) of SL.No.26 of Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 read with Circular No. 126/45/2019-GST dated 22.11.2019