We have already given an update on job work of textiles. In the said update, it was mentioned that refund of unutilized credit is not admissible to the supplier of textiles. Notification No. 5\/2017-Central Tax(Rate) dated 28^{th<\/sup> June,2017 has been issued in this regard. It is worthwhile to mention here that the raw material or consumables used in textile manufacture such as colour, chemicals, etc. are chargeable to tax @ 18% while output will suffer the tax @ 5% only. Therefore, since there is restriction of non-admissibility of credit to the trader only, the job worker will get the refund of credit so accumulated. Therefore, it is interpreted that dealers of textiles will send the material for job work only. By doing this, the tax implication will be the same but the refund of overflow of credit will be available as there is no specific denial like that in the case of supply of textiles.<\/span><\/p>\n}

Now, another set of experts is of the view that in case of job work, the principal supply is of material, therefore, while assessing the transaction, it should also be considered as an independent supply. Accordingly, it is alleged that the valuation should be as per composite supply. In this regard, it is submitted that the term composite supply or mixed supply comes into existence only if there is more than one supply. In the instant case, there is only one type of supply namely “job work”. According to schedule II of CGST Act, it is considered as supply of service. Accordingly, it shall be treated as a supply of service only for the purpose of determining the value, classification and rate of tax. It cannot be said that the job work has to be seen after splitting up the component of goods and service.<\/span><\/p>\n

Under GST regime, the term job work is defined in section 2(68) of CGST Act, 2017 as follows:-<\/span><\/p>\n

“(68) \u201cjob work\u201d means any treatment or process undertaken by a person on goods<\/u><\/strong> belonging to another registered person<\/u> <\/strong>and the expression \u201cjob worker\u201d shall be construed accordingly;”<\/em><\/span><\/p>\n

The analysis of above definition makes it clear that any process carried out by a person on the goods belonging to another registered person will be construed as job work. Thus, the goods will always belong to other person. If the view point as above is accepted, the concept of job work will lose its relevance. Interestingly, this analogy is applied only in case of textiles as there is bar on claiming the refund of accumulated credit on it. In other cases, this analogy is not been drawn.<\/span><\/p>\n

It is pertinent to note that in respect of Printing of Books a Circular No. 11\/11\/2017-GST dated 20th October 2017 has been issued to clarify as follows:-<\/span><\/p>\n

\n
• In the case of printing of books, pamphlets, brochures, annual reports, and the like, where only content is supplied<\/strong> by the publisher \/ person owning rights on intangible inputs and physical inputs like paper, ink, etc. belong to printing press, it would constitute as supply of service.<\/strong><\/em><\/span><\/li>\n
• In case of supply of printed envelopes, letter cards, printed boxes, tissues, napkins, wall paper etc. falling under Chapter 48 or 49, printed with design, logo etc. supplied by the recipient of goods but made using physical inputs including paper belonging to the printer, it will be considered as supply of goods.<\/em><\/span><\/li>\n<\/ul>\n

  Entry no. 119 of Notification No.2\/2017-Central Tax (Rate) dated 28th June, 2017 exempts the Printed books, including Braille books. However, the above referred circular has clarified that where the content is supplied by the author, it will be deemed as supply of service.<\/span><\/p>\n

  In this regard, it is worthwhile to mention here that in case of books, content is always supplied by the author or person owning rights on intangible inputs. Therefore, if the analogy drawn in case of job work of textiles is accepted here; the value of content will also be considered and the transaction will be deemed as composite\/mixed supply. However, since it is not the case of inverted tax structure, these interpretations are not coming from this field. Here, it should be noted that these sort of interpretations that defeat the purpose of framing a legal provisions do not hold good and have been quashed several times even by the hon’ble Supreme Court.<\/span><\/p>\n

  You can reach us at www.capradeepjain.com<\/u>, at our facebook page on https:\/\/www.facebook.com\/GSTTODAYBYPRADEEPJAIN\/<\/u> as well as follow us on Twitter at https:\/\/www.twitter.com\/@capradeepjain21<\/u><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

  We have already given an update on job work of textiles. In the said update, it was mentioned that refund of unutilized credit is not admissible to the supplier of textiles. Notification No. 5\/2017-Central Tax(Rate) dated 28th June,2017 has been issued in this regard. It is worthwhile to mention here that the raw material or … Read more<\/a><\/p>\n","protected":false},"author":17,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[15],"tags":[481,453],"class_list":["post-4181","post","type-post","status-publish","format-standard","hentry","category-gst","tag-job-work","tag-job-worker"],"yoast_head":"\n