Anuj Pvt. Ltd., a registered manufacturer, sent steel cabinets worth 50 lakh under a delivery challan to M/s Siddhi Tools, a registered job worker,…

As per para 3 of Schedule II to the CGST Act, 2017 any treatment or process which is applied to another person's goods is a supply of services and accordingly is subject to GST rate applicable for services. In the given case, M/s Siddhi Tools (job worker) undertakes the process of mounting the steel cabinets of Anuj Pvt. Ltd. (principal) on metal frames. In view of para 3 of Schedule II to the CGST Act, 2017 cited above, the mounting activity classifies as a service even though the metal frames are also supplied as a part of the mounting activity. Accordingly, the job charges will be chargeable to GST at a rate of 18%, which is the applicable rate for services. Further, the value of steel cabinets will not be included in the value of taxable supply made by M/s Siddhi Tools as the supply of cabinets does not fall within the scope of supply to be made by M/s Siddhi Tools. M/s Siddhi Tools is only required to mount the steel cabinets, which are to be supplied by Anuj Pvt. Ltd., on metal frames, which are to be supplied by it. As regards sale of waste generated during the job work, since M/s Siddhi Tools is registered, the tax leviable on the supply will have to be paid by it Such supply will be treated as supply of goods and subject to GST rate applicable for metal waste. Accordingly, the GST liability of M/s Siddhi Tools will be computed as under: Particulars Amount (₹) Job charges 5,00,000 GST @ 18% (A) 90,000 Sale of metal waste 45,000 GST @ 12% (B) 5,400 Total GST payable (A) + (B) 95,400