GST Rate Changes in the Job Work Sector – 56th GST Council
Meeting
The 56th GST Council
Meeting held on 3rd September 2025 brought significant changes to
the job work sector. These changes aim to rationalize rates, promote
manufacturing support services, and reduce costs for industries heavily
dependent on job work.
Key GST Rate Changes
|
S.
No.
|
Nature
of Job Work Service
|
Earlier
Rate
|
Revised
Rate
|
|
1
|
Job
work in relation to umbrella
|
12%
with ITC
|
5%
with ITC
|
|
2
|
Job
work for printing of goods under Chapter 48 or 49 (attracting 12% GST)
|
12%
with ITC
|
5%
with ITC
|
|
3
|
Job
work in relation to bricks (5% GST items)
|
12%
with ITC
|
5%
with ITC
|
|
4
|
Job
work services for pharmaceutical products (Chapter 30)
|
12%
with ITC
|
5%
with ITC
|
|
5
|
Job
work for hides, skins, and leather (Chapter 41)
|
12%
with ITC
|
5%
with ITC
|
|
6
|
Residual
job work services (not specifically covered)
|
12%
with ITC
|
18%
with ITC
|
Analysis of the Changes
1. Umbrella
Industry Relief
o The
umbrella manufacturing sector will benefit from reduced job work costs, which
may bring down final prices and help small-scale units.
2. Printing
Industry
o GST
on job work for goods under Chapters 48 and 49 (paper, books, packaging
material) has been cut to 5%, reducing the burden on education-related
and packaging sectors.
3. Brick
Industry
o Bricks
attract 5% GST, and aligning job work services with this rate ensures cost
efficiency for builders and real estate developers.
4. Pharmaceutical
Sector
o Reduction
to 5% for pharma job work is a major relief, encouraging outsourcing of
production and ensuring affordable medicine manufacturing.
5. Leather
Industry
o Leather
and hide processing industries, often operating with tight margins, will gain
from reduced GST rates. This move supports exports and domestic consumption.
6. Residual
Job Work
o Interestingly,
the residual entry rate has increased from 12% to 18%, which could
negatively impact industries not specifically covered in the concessional
categories.
Conclusion
The GST Council’s
decision reflects an attempt to provide targeted relief to umbrella,
printing, bricks, pharma, and leather industries by reducing job work GST
rates to 5% with ITC. However, the residual job work category faces a
hike to 18%, which may increase costs for other industries.
Overall, the move
balances revenue concerns with sector-specific relief, benefitting industries
that are labor-intensive and export-oriented. The revised GST rates on services will be effective from 22nd September 2025.
Disclaimer: All the Information is based on the notification, circular advisory and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
Click here
