5% GST Applicable On Job Work For Processing Of “Barley” Into “Malted Barley”: CBIC

The Central Board of Indirect Taxes and Customs (CBIC) has clarified that 5% GST is applicable on job work for processing of “barley” into “malted barley”.

The Board has issued the clarification in respect of the recommendations of the GST Council in its 52nd meeting held on October 7, 2023, in New Delhi with reference to the GST levy.

The issue raised was whether job work for processing “Barley” into “Malted Barley” attracts 5% GST as applicable to "job work in relation to food and food products” or 18% as applicable on “job work in relation to the manufacture of alcoholic liquor for human consumption”.

References have been received to clarify whether services by way of job work for conversion of barley into malt attracts GST at 5% prescribed for "job work in relation to all food and food products falling under Chapter 1 to 22 of the customs tariff" or at the rate of 18% prescribed for "services by way of job work in relation to the manufacture of alcoholic liquor for human consumption”.

Malt is a food product. It can be directly consumed as part of food preparations or can be used as an ingredient in food products and also used for the manufacture of beer and alcoholic liquor for human consumption. However, irrespective of end-use, the conversion of barley into malt amounts to job work in relation to food products.

The Board clarified that job work services in relation to the manufacture of malt are covered by the entry at Sl. No. 26 (i) (f) which covers “job work in relation to all food and food products falling under chapters 1 to 22 of the customs tariff” irrespective of the end use of that malt and attracts 5% GST.

Circular No. 206/18/2023-GST

Click Here To Read The Circular