Job Work GST Rate for Manufacturers in 2026
Last updated: 26 October 2026
Quick Answer: The applicable GST rate depends primarily on the nature of the goods being processed and whether the owner of such goods is registered under GST. From 22 September 2025, the job work GST rate is 5% on listed goods under CTH 9988 and tailoring services, 1.5% on diamonds (falling under Chapter 71 of the Customs Tariff Act, 1975) and 18% on other job work. Processing an unregistered owner's goods is taxed separately: 5% for printing and 18% otherwise. The goods processed and their owner's registration decide the rate, and HSAG Consulting advises manufacturers on that GST position.
As per section 2(68) of the Central Goods and Services Tax Act, 2017, job work is any treatment or process a person carries out on goods belonging to another registered person. GST on job work is charged on the job worker's service, while the principal's goods move without payment of tax under section 143 of the same Act. The job work GST rate in force, the SAC code, the time limits and the compliance steps follow.
What did Notification 15/2025 change in the job work GST rate?
Notification No. 15/2025-Central Tax (Rate), dated 17 September 2025, substituted serial number 26 against Heading 9988 of notification No. 11/2017-Central Tax (Rate), effective 22 September 2025. Items (i) to (iv) of Heading 9988 cover services in relation to job work as specified under section 2(68), i.e., the applicability of items (i) to (iv) of CTH 9988 is only on goods provided by registered persons. The table below provides the GST rate for job work under the aforementioned notification:
| Job work on goods of a registered owner | CGST | SGST | IGST |
|---|---|---|---|
| (i) Diamonds falling under Chapter 71 of the Customs Tariff Act, 1975 | 0.75% | 0.75% | 1.5% |
| (ii) Listed goods: (a) food and food products (Chapters 1 to 22); (b) Chapter 23 products except dog and cat food (heading 2309); (c) Chapter 30 goods; (d) hides, skins and leather of Chapter 41; (e) printing of newspapers, books including Braille books, journals and periodicals; (f) printing of Chapter 48 or 49 goods attracting 2.5% (CGST/SGST)/5% (IGST) or Nil rate; (g) textiles and textile products (Chapters 50 to 63); (h) bricks of Chapters 68 or 69 attracting 2.5% (CGST/SGST)/5% (IGST); (i) Chapter 71 products other than diamonds; (j) handicraft goods; (k) umbrella | 2.5% | 2.5% | 5% |
| (iii) Manufacture of alcoholic liquor for human consumption | 9% | 9% | 18% |
| (iv) All other job work (residuary) | 9% | 9% | 18% |
The above entries apply only where the activity qualifies as 'job work' under section 2(68), i.e., where the goods belong to a registered person.
The Ministry of Finance FAQs on the 56th GST Council decisions (Press Information Bureau, 3 September 2025) state that residuary job work, earlier taxed at 12%, now attracts 18%. They add that job work on pharmaceutical products and on Chapter 41 hides, skins and leather moved from 12% to 5% with input tax credit. The same FAQs explain that job work was not exempted outright because exemption would break the input tax credit chain across the layers of job workers that manufacturing involves.
There are three other related entries available under CTH 9988, as items (v) to (vii). These apply specifically to tailoring services or where the goods belong to a person who is not registered under GST, because section 2(68) limits job work to goods of a registered person. Treatment or process for printing newspapers, books, journals and periodicals, or Chapter 48 or 49 goods attracting 2.5% or Nil, attracts 2.5% CGST, as do tailoring services. The table below provides the GST rate for the services in items (v) to (vii):
| Particulars | CGST | SGST | IGST |
|---|---|---|---|
| (v) Services by way of any treatment or process on goods belonging to another person, in relation to: a. printing of newspapers, books (including Braille books), journals and periodicals; b. printing of all goods falling under Chapter 48 or 49 in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) which attract integrated tax at 5% or Nil | 2.5% | 2.5% | 5% |
| (vi) Tailoring services | 2.5% | 2.5% | 5% |
| (vii) Services by way of any treatment or process on goods belonging to another person, other than (v) and (vi) above | 9% | 9% | 18% |
What is the SAC code for job work?
Job work services are classified under SAC code 9988, described in the rate notification as "Manufacturing services on physical inputs (goods) owned by others". The GST rate on job work services under this heading depends on the nature of the goods processed and on whether the owner of the goods is registered, so one job worker can charge different rates to different customers.
How does job work under GST work for a manufacturer?
Under section 143, a registered person, called the principal, can send inputs or capital goods to a job worker without payment of tax, under intimation (FORM GST ITC-04) and subject to prescribed conditions, and then send them on to another job worker or supply them to the customer from the job worker's premises. Keeping proper accounts for the goods remains the principal's responsibility.
Rule 45 of the Central Goods and Services Tax Rules, 2017 requires inputs, semi-finished goods or capital goods to travel under a challan issued by the principal, with the relevant details mentioned in rule 55. That applies even where goods go directly to the job worker without touching the principal's premises. Where goods move from one job worker to another, either the principal or the sending job worker can issue the challan, and a challan endorsed by one job worker can be further endorsed by the next.
Challan details then go into FORM GST ITC-04 by the twenty-fifth day of the month after each specified period mentioned in section 143. The specified period depends on the aggregate turnover for the preceding financial year and could be half-yearly, i.e., April to September and October to March, for principals having turnover of more than ₹5 crore, or annual otherwise.
Section 143 requires the principal to bring back inputs within one year and capital goods within three years of their being sent out, or to supply them from the job worker's premises within those periods. On sufficient cause being shown, the Commissioner can extend each limit, by up to one year for inputs and two years for capital goods. Moulds and dies, jigs and fixtures, and tools are excluded from the limits altogether.
Goods not brought back or supplied in time are deemed supplied by the principal to the job worker on the day they were sent out. Rule 45(4) requires that deemed supply to be declared in FORM GSTR-1, with tax payable along with applicable interest; the compliance calendar sets out the monthly GSTR-1 date.
Can the principal claim input tax credit on goods sent for job work?
Yes, section 19 of the 2017 Act allows the principal to claim input tax credit on inputs and capital goods sent to a job worker, subject to the prescribed conditions. Credit is available even where the goods go straight to the job worker without first reaching the principal's place of business, as section 19 deems the principal to have received such goods for the purpose of availing input tax credit.
Section 19(3) and 19(6) carry the same deeming rule into the credit provisions: inputs not received back within one year, and capital goods within three years, are deemed supplied on the day they were sent out. Where the goods went directly to the job worker, the one year or three year period runs from the date the job worker receives them. Section 19(7) excludes moulds and dies, jigs and fixtures, and tools, so no deemed supply arises on those items however long they stay with the job worker.
Can a manufacturer supply goods from the job worker's premises?
Yes, section 143(1)(b) lets the principal supply the inputs or capital goods, after completion of job work or otherwise, from the job worker's premises on payment of tax within India, or with or without payment of tax for export. Before doing so, the principal must declare that premises as his additional place of business. No such declaration is required where the job worker is registered under GST, or where the principal supplies goods notified by the Commissioner.
Turnover treatment follows the same logic. Under Explanation (ii) to section 22 of the 2017 Act, a supply of goods after completion of job work by a registered job worker is treated as a supply by the principal. The value of those goods is not included in the registered job worker's aggregate turnover.
Does a job worker need GST registration?
Not always. Section 22(1) requires a supplier to register once its aggregate turnover in a financial year exceeds ₹20 lakh, or ₹10 lakh for supplies from the special category States, subject to the compulsory registration cases in section 24.
Common Mistakes in Job Work Under GST
- Missing challans: Rule 45 requires every dispatch of inputs, semi-finished goods or capital goods from the principal to a job worker, including goods sent directly, to travel under a challan issued by the principal. Goods passed from one job worker to the next may instead move under the sending job worker's challan.
- Lapsed time limits: inputs kept with a job worker beyond one year, or capital goods beyond three years, become deemed supplies on the day they were sent out. Moulds and dies, jigs and fixtures, and tools are outside this rule, and a Commissioner's extension moves the limit.
- Wrong SAC or job work GST rate: applying the residuary 18% to goods that qualify for the 5% list or vice versa, or applying the job work rates to an unregistered owner's goods.
- Unreported deemed supplies: a deemed supply not declared in FORM GSTR-1 leaves the tax and the applicable interest unpaid.
- Supplies from undeclared premises: finished goods supplied from an unregistered job worker's premises without declaring it as an additional place of business breach section 143(1)(b), unless the goods are ones the Commissioner has notified.
How does a manufacturer get job work GST compliance done?
HSAG Consulting lists GST compliance, return filing, reconciliations and input tax credit advisory among the indirect tax work on its taxation services page. Its industrial and manufacturing industry page covers input tax credit and plant-level process audits for manufacturers.
A guide to outsourced accounting for a manufacturing company shows how job work challans and the stock lying with each job worker are kept in one register.
Discuss your job work GST questions
To discuss job work invoicing or challans, leave your details on the contact page and the team will contact you.
