ABC Ltd. registered in Delhi, sent wooden doors worth Rs. 20 lakhs to Mr. X, registered job worker for job work on 1st April 2018. Mr X has to add some door fittings. The door fittings are to be supplied by Mr. X.

Mr. X charged Rs 50000/- as job work charges and Rs. 5 lakhs for door fittings supplied.
Waste generated during job work is sold by Mr X as scrap for Rs 15,000.

Assuming GST rate on door fittings is 18% , scrap is 5% and rate of service is 5%. Determine at what rate Mr. X will charge GST on job work? Also determine whether GST is levied on scrap sold by Mr. X and compute his tax liability?


As per Schedule II clause 3 Any treatment or process which is applied to another person's goods is a supply of services.

In view of above clause addition of door fittings is considered as service even if fittings are supplied by Mr. X. Therefore job charges will be taxable @ 5% i.e. applicable rate of service.

Further waste generated during job work is sold by Mr. X for a consideration of Rs 15000/-, it is a supply as per section 7 of CGST Act. Also Mr. X is registered person so he is liable to pay GST on scrap at the rate applicable on scrap as per section 143(5) reproduced below:

“any waste and scrap generated during the job work may be supplied by the job worker directly from his place of business on payment of tax, if such job worker is registered, or by the principal, if the job worker is not registered.”

Computation of GST liability of Mr. X:

Job work charges 50,000
GST @ 5% 2,500
Price charged for Door fittings 5,00,000
GST @ 18% 90,000
Sale of scrap 15,000
GST @ 5% 750
Total GST payable 93,250