The applicant M/s. Uday Laxman Jadhav was registered under GST law. The applicant submitted that they were engaged in the providing services of Testing and Refinery of gold.

The applicant submitted that they receive gold jewellery or coins/biscuits, after melting old jewellery from service recipients to refine pure gold and testing the purity of gold. All gold jewellery or coins/biscuits collected by applicants are placed in a vessel made up of magnesium and heated and melted at a temperature between roughly 1000 to 1200 degree Celsius in the furnace. Upon completion of process and analysis, applicant issued certificate of purity of gold. 

The applicant sought the Advance Ruling on the various issues.

Firstly, whether services of refining of gold from old jewellery and coins/biscuits, and conversion of old gold jewellery into coins/biscuits as per specification given by service recipient; Provided to registered person will be covered under the definition of job work under section 2 (68) of CGST Act, 2017. What is the classification and rate of tax for these services provided to registered people and unregistered persons.

Secondly, what is the classification and rate of tax for services of testing of purity of gold?

Thirdly, if the applicant renders the service of refinement of old gold jewellery or coins/ biscuit as well as testing the purity of gold, then it will be considered as composite supply? If yes, what is the rate of tax applicable on it?

The Coram consisting of Sanjay Saxena and Mohit Aggarwal observed that services provided will be covered under the definition of Job work under Section 2(68) of CGST Act, 2017 only when provided to a registered person and not as Job work when provided to unregistered person.

The Authority further ruled that the rate of GST for the above service provided to registered persons is 5% in terms of Sr. No. 26 (i) (c) of Notification No. 11/2017-CT (Rate) dated June 28, 2017. The rate of GST for the service provided to unregistered persons is liable to 18% in terms of Sr. No. 26 (iv) of Notification No. 11/2017-CT (Rate) dated June 28, 2017.

The AAR held that the classification of testing of purity of gold is 9983 and GST rate is liable to 18 % in terms of Sr. No. 21 of Notification No. 11/2017-CT (Rate) dated June 28, 2017.

“The service of refinement of old gold jewellery or coins/ biscuit as well as testing of purity of gold will be covered under mixed supply in terms of Section 2(74) of CGST Act, 2017. The GST rate would be 18 %,” the AAR said.