2026-VIL-188-AAR
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SGST Advance Ruling Authority

GST – Maharashtra AAR - Nature of activity of preparing ready-mix concrete from inputs supplied free of cost by a registered recipient, Scope of Job work under Section 2(68) of the CGST Act, 2017 - Applicant set up a ready-mix concrete batching plant at the recipient's project site and carried out weighing, batching, mixing, chemical treatment and primary transportation – The inputs supplied free of cost by the recipient, ownership of which never passed to the Applicant, while the Applicant bore only operational expenses such as power, fuel, labour and maintenance - Work orders and invoices described the activity as mixing and primary transportation with rates stated to be without material - Whether the activity is a supply of goods or a supply of services and whether it qualifies as job work under Section 2(68) of the CGST Act, 2017 - HELD - Under Section 7(1A) read with Para 3 of Schedule II, any treatment or process applied to another person's goods is a supply of services, and the taxable event under GST is supply and not manufacture. Even if a distinct product emerges, the statutory deeming fiction prevails and the reliance on excise jurisprudence only establishes emergence of a new product without altering the classification of the activity as a service - Job work under Section 2(68) requires a treatment or process, on goods belonging to another person, who is a registered person. All three ingredients were satisfied since the recipient is a registered person, ownership of the inputs and resultant concrete remained with it, and substantial processing was undertaken. Following the Circular dated 26.03.2018, use of the job worker's own consumables such as power and fuel does not take the activity outside job work, and job work may or may not amount to manufacture - The documents on record showing rates without material and invoices only for mixing and primary transportation sufficiently addressed the objection of the jurisdictional officer - Applicant held not to be supplying ready-mix concrete as goods, and the activity held to be a supply of service qualifying as job work – Ordered accordingly - Classification of job work service of preparing ready-mix concrete on inputs owned by a registered recipient under Heading 9988 and SAC 998853 - Applicant claimed classification as other non-metallic mineral product manufacturing services within manufacturing services on physical inputs owned by others - Whether the activity is classifiable under Heading 9988 and, more specifically, under SAC 998853 - HELD - Heading 9988 covers services performed on physical inputs owned by units other than the service provider, characterised as outsourced portions of a manufacturing process or a complete outsourced manufacturing process, where the output is not owned by the service provider and the value is based on the service fee and not on the value of goods manufactured. This description exactly matches the Applicant's arrangement. SAC 998853 expressly includes concrete, cement and plaster article manufacturing services and other non-metallic mineral product manufacturing services, and ready-mix concrete being a form of concrete produced by a specialised automated process is directly relatable to it. No separate exclusion or more specific competing entry applies - Activity held classifiable under Heading 9988 and specifically under SAC 998853 as other non-metallic mineral product manufacturing services - Rate of tax on job work services relating to ready-mix concrete under Sl. No. 26(id) and Sl. No. 26(iv) of Notification No. 11/2017-Central Tax (Rate) and effect of substitution by Notification No. 15/2025-Central Tax (Rate) - Rate of tax for the periods before and after the substitution of Sl. No. 26 with effect from 22.09.2025 - HELD - As clarified by Circular dated 22.11.2019, there is a clear demarcation between the two entries, with Sl. No. 26(id) covering only job work as defined in Section 2(68) undertaken on goods belonging to another registered person, and Sl. No. 26(iv) being a residual entry excluding services covered by item (id) and therefore covering services on goods owned by persons other than registered persons. Since the recipient is a registered person and the activity qualifies as job work, the activity falls under Sl. No. 26(id) and recourse to the residual entry is not permissible. As the question concerns an ongoing continuous supply and the rate changed during pendency of the proceedings, the ruling is required to reflect the rate for both periods - GST is payable at 12% up to 21.09.2025 under Sl. No. 26(id) and at 18% from 22.09.2025 under Sl. No. 26 as substituted by Notification No. 15/2025-Central Tax (Rate).
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