The Gujarat Advance Rulings Authority (AAR) ruled that services through pharmaceutical drug work attracted 12% Goods and Services Tax (GST).
The applicant, M / s. Romano Drugs Pvt. Ltd. argued that Article 2 (68) of the CGST Act of 2017 defines work as âany treatment or process undertaken by a person on goods belonging to another registered personâ. The labor worker is required to carry out the process specified by the principal on the goods belonging to him. Sl. The n Â° 26 of the notification n Â° 11/2017-CT (rate) of 2-6-2017 defines the rates of the GST to be collected on manufacturing services on physical inputs (goods) belonging to third parties. That the notification n Â° 11/2017 of 06-28-2017 has been modified by the notification n Â° 20/2019 of 09/30/2019, and the following entry has been inserted at serial number-26 namely â(id) Services by way of work other than (i), (ia), (ib) and (ic) above “, which is payable by CGST at the rate of 6% and (iv) Manufacturing service on inputs physical (goods) belonging to third parties other than those specifically specified, is the responsibility of the CGST at the rate of 9%.
The claimant argued that, in accordance with the CBIC Circular, if a service provided as processing or processing performed by a person on property belonging to another registered person will be considered as falling under the employment labor service and is subject to 12% GST. .
The applicant requested the advance ruling on the tax rate applicable to the services through a work work on Diphenylmethoxy ‘N’ N-diethylaminethanol HCI (work work of pharmaceutical drugs), undertaken by the supplier (applicant) in accordance with to the clarification issued by the CBIC. on Job work empty circular n Â° 126/45 / 2019- TPS of 22.11.2019 i.e. if the rate of GST 18% or 12% must be invoiced by the supplier.
The coram of Sanjay Saxena and Arun Richard ruled that 12% GST is payable on services through a work on diphenylmethoxy ‘N’ N-diethylaminethanol HCI (work on pharmaceutical drugs).
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