Businesses engaged in job work under the Goods and Services Tax (GST) regime often face challenges in determining the correct tax rate applicable to different sectors. While the general GST rate for job work services is 18%, the GST law provides concessional rates of 1.5% and 5% for specified industries and products.
A quick reference guide on GST Rates for Job Work Services classifies job work services under HSN/SAC 9988, providing sector-wise GST rates along with the applicable conditions and product classifications.
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What is Job Work under GST?
Job work refers to any treatment or process undertaken by a person on goods belonging to another registered person. The principal sends goods to a job worker for processing, manufacturing, assembling, repairing, finishing or similar activities, while ownership of the goods continues to remain with the principal.
The applicable GST rate depends on the nature of goods on which the job work is performed and the specific notification governing such services.
Sector-wise GST Rates for Job Work Services
| Sr. No. | Sector / Service Category | CGST Rate | Total GST Rate | Coverage / Key Condition |
| 1 | Diamonds | 0.75% | 1.5% | Services by way of job work relating to diamonds falling under Chapter 71. |
| 2 | Food and food products | 2.5% | 5% | All food and food products falling under Chapters 1 to 22. |
| 3 | Animal feed and related products | 2.5% | 5% | Products falling under Chapter 23, except dog and cat food falling under heading 2309. |
| 4 | Pharmaceutical goods | 2.5% | 5% | Goods falling under Chapter 30. |
| 5 | Hides, skins and leather | 2.5% | 5% | Hides, skins and leather falling under Chapter 41. Exception: leather goods or footwear under Chapters 42 or 64. |
| 6 | Printing – newspapers, books and periodicals | 2.5% | 5% | Printing of newspapers, books including Braille books, journals and periodicals. |
| 7 | Printing – Chapters 48 or 49 goods | 2.5% | 5% | Printing of goods falling under Chapters 48 or 49 attracting central tax at 2.5% or Nil. |
| 8 | Textiles and textile products | 2.5% | 5% | Textiles and textile products falling under Chapters 50 to 63. |
| 9 | Bricks | 2.5% | 5% | Bricks falling under Chapters 68 or 69 attracting central tax at 2.5%. |
| 10 | Precious goods other than diamonds | 2.5% | 5% | Products, other than diamonds, falling under Chapter 71. |
| 11 | Handicraft goods | 2.5% | 5% | Services by way of job work relating to handicraft goods. |
| 12 | Umbrella | 2.5% | 5% | Services by way of job work relating to umbrellas. |
| 13 | Tailoring services | 2.5% | 5% | Tailoring services covered under the applicable job work rate entry. |
| 14 | Alcoholic liquor for human consumption | 9% | 18% | Job work in relation to manufacture of alcoholic liquor for human consumption. |
| 15 | Other job work services | 9% | 18% | Services by way of job work other than the specified lower-rate categories. |
| 16 | Other treatment or process on another person’s goods | 9% | 18% | Any treatment or process on goods belonging to another person, other than the lower-rate categories. |
Key Takeaways
The reference indicates that the lowest GST rate of 1.5% is available only for job work relating to diamonds. A concessional 5% GST applies to several specified sectors including food products, pharmaceuticals, textiles, handicrafts, leather, printing, bricks, umbrellas and precious goods (other than diamonds), subject to the prescribed chapter headings and conditions.
Where a job work service does not fall within any of these specified concessional categories, the general GST rate of 18% applies. This also covers job work relating to alcoholic liquor for human consumption and other treatment or processing of goods belonging to another person.
Important Compliance Notes
The guide also highlights the following important points:
- The total GST rate assumes CGST plus an equal SGST for intra-State supplies. For inter-State supplies, IGSTwould generally apply at the equivalent rate.
- Taxpayers should verify the correct product classification, chapter heading, description of goods and all applicable conditions before determining the GST rate.
- The guide is intended as a quick reference and should be read along with the latest GST notifications and circulars.
- If a job work service is not specifically covered under a concessional category, the general job work GST rate may apply.Â
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