GST Job Work
This query is : Resolved
12 June 2017
Services by way of job work in relation to –
Textile yarns (other than man-made fibre/filament) & textile fabrics
Cut and polished diamonds; precious and semi-precious stones, or plain and studded jewellery of gold and other precious metals, falling under chapter 71 of HSN
Printing of books (including Braille books), journals and periodicals
Processing of leather
Taxable @ 5% with full ITC
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12 June 2017
plastic graules bought from supplier and sent for job work. what will be the GST rate
26 July 2024
When dealing with plastic granules that are bought from a supplier and sent for job work, the GST treatment involves understanding the applicable rates and rules for both the purchase of raw materials and the job work services.
### GST Rate for Plastic Granules and Job Work
**1. **GST Rate on Plastic Granules (Raw Materials):**
- **HSN Code:** Plastic granules are classified under HSN code 3901, which refers to "Polymers of ethylene, in primary forms."
- **GST Rate:** The GST rate on plastic granules, classified under HSN 3901, is 18%. This rate applies to the raw materials when purchased from suppliers.
**2. **GST Treatment for Job Work:**
**Job Work Definition:**
- **Job Work:** Job work refers to the process where goods are sent to a third party for further processing or manufacturing, and the processed goods are then returned to the principal.
**GST Rate for Job Work Services:**
- **Job Work Services:** The GST rate on job work services depends on the type of job work and the industry. For plastic products, job work services are generally subject to GST at the rate of 18%.
**HSN Codes for Plastic Products:**
- **HSN Code for Job Work:** The GST rate for job work services related to plastic products is 18%, and these services fall under HSN code 9988.
### **Practical Example:**
1. **Purchase of Plastic Granules:**
- **Purchase Price:** ₹1,00,000
- **GST @ 18%:** ₹18,000
- **Total Invoice Amount:** ₹1,18,000
2. **Job Work:**
- **Job Work Cost:** ₹10,000 (for processing the granules)
- **GST @ 18%:** ₹1,800
- **Total Invoice Amount:** ₹11,800
### **Reporting in GST Returns:**
**For the Purchaser (Principal):**
- **Input Tax Credit (ITC):** You can claim ITC on the GST paid on the purchase of plastic granules and the job work services, provided the goods or services are used for taxable supplies.
**For the Job Worker:**
- **Invoice Issuance:** The job worker will issue an invoice for the job work services including the applicable GST.
- **Reporting in GST Returns:** The job worker reports the job work services and the GST collected in their GST returns.
### **Summary**
- **Plastic Granules Purchase:** GST @ 18% on the purchase of plastic granules (HSN 3901).
- **Job Work Services:** GST @ 18% on job work services (HSN 9988).
Ensure to accurately document and report these transactions in your GST returns. For specific cases or complex scenarios, consulting with a GST professional or tax advisor is advisable.
### GST Rate for Plastic Granules and Job Work
**1. **GST Rate on Plastic Granules (Raw Materials):**
- **HSN Code:** Plastic granules are classified under HSN code 3901, which refers to "Polymers of ethylene, in primary forms."
- **GST Rate:** The GST rate on plastic granules, classified under HSN 3901, is 18%. This rate applies to the raw materials when purchased from suppliers.
**2. **GST Treatment for Job Work:**
**Job Work Definition:**
- **Job Work:** Job work refers to the process where goods are sent to a third party for further processing or manufacturing, and the processed goods are then returned to the principal.
**GST Rate for Job Work Services:**
- **Job Work Services:** The GST rate on job work services depends on the type of job work and the industry. For plastic products, job work services are generally subject to GST at the rate of 18%.
**HSN Codes for Plastic Products:**
- **HSN Code for Job Work:** The GST rate for job work services related to plastic products is 18%, and these services fall under HSN code 9988.
### **Practical Example:**
1. **Purchase of Plastic Granules:**
- **Purchase Price:** ₹1,00,000
- **GST @ 18%:** ₹18,000
- **Total Invoice Amount:** ₹1,18,000
2. **Job Work:**
- **Job Work Cost:** ₹10,000 (for processing the granules)
- **GST @ 18%:** ₹1,800
- **Total Invoice Amount:** ₹11,800
### **Reporting in GST Returns:**
**For the Purchaser (Principal):**
- **Input Tax Credit (ITC):** You can claim ITC on the GST paid on the purchase of plastic granules and the job work services, provided the goods or services are used for taxable supplies.
**For the Job Worker:**
- **Invoice Issuance:** The job worker will issue an invoice for the job work services including the applicable GST.
- **Reporting in GST Returns:** The job worker reports the job work services and the GST collected in their GST returns.
### **Summary**
- **Plastic Granules Purchase:** GST @ 18% on the purchase of plastic granules (HSN 3901).
- **Job Work Services:** GST @ 18% on job work services (HSN 9988).
Ensure to accurately document and report these transactions in your GST returns. For specific cases or complex scenarios, consulting with a GST professional or tax advisor is advisable.
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