Increase in GST rates for finished leather & job work from 5% to 12%

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July 20, 2022

Members of the Council

Sub : Increase in GST rates for finished leather & job work from 5% to 12%

Dear Member

We would like to inform you that a decision was taken in the 47th GST Council meeting held in Chandigarh on June 28 and 29, 2022 to increase GST rates from 5% to 12% with effect from July 18, 2022 for the following, as part of rationalisation of inverted duty structure.

1)      Prepared/finished leather/chamois leather / Composition leather
2)      Job work in relation to processing of hides, skins and leather
3)      Job work in relation to manufacture of leather goods and footwear

Accordingly, please find below the update.

1)      Government has issued CGST Notification No. 6/2022 and IGST Notification No. 6/2022 both dated 13th Juily 2022 regarding increase in GST from 5% to 12% on finished leather/chamois leather/composition leather falling under HS Codes 4107 to 4115. Serial No. vi of Para C of the said notifications may be referred.

2)      The following may also be kindly noted

As per serial No. 26 (e) of CGST Notification No. 11/2017 dated 28.6.2017 and IGST Notification No. 8/2017 dated 30.6.2017, the GST rate of 5% was fixed for Job work in relation to Processing of hides, skins and leather falling under Chapter 41 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975)

Also, GST rate on job work by way of manufacture of leather goods or foot wear falling under Chapter 42 or 64 was reduced from 18% to 5% by inserting Serial No. 26 (ea) through CGST Notification No. 1/2018 dated 25.1.2018 and IGST Notification No. 1/2018 dated 25.2.2018.

Now, the Government has issued CGST Notification No. 3 and IGST Notification No. 3 both dated 13th July 2022 wherein the aforementioned entries No. 26 (e) and 26 (ea) have been omitted. On account of this, the aforesaid job works may now have to be classified under Serial No. 26 (id) with a GST rate of 12% as notified by CGST notification No. 20/2019 dated 30.9.2019 and IGST Notification No.19/2019 dated 30.9.2019 . Members may also check with GST formations on this.

            Note : In respect of CGST notifications only the CGST rate will be mentioned. Equal SGST will also apply. Thus, if the rate in CGST notification is mentioned as 6%, equal SGST of 6% will also apply and the total GST rate will be 12%

Copies of aforementioned GST Notifications are enclosed herewith.

Thanks and regards

R. Selvam IAS
Executive Director

GST increase job work IGST notification

GST incresae finished leather IGST notification

GST rate increase of finished leather – CGST Notification

IGST notification – Others

CGST notification – Others

GST increase Job work CGST notification