Job Work HSN Code: Understanding HSN Classifications for Job Work Services
Job work services are widely used in manufacturing and processing where one person sends goods to another person for finishing or further processing. Under GST, these services must be billed with the correct job work HSN code so that tax, input credit and returns stay accurate.
This guide explains what the job work HSN code is, how the eight digit codes work for different sectors and how GST rates apply to job work services in the present structure.
What Is the Job Work HSN Code?
The GST law defines job work as any treatment or process carried out by a person on goods that belong to another registered person. In simple words, the job worker does processing on inputs owned by the principal and charges a processing fee as consideration.
In GST classification, job work services on goods are grouped under chapter ninety nine, in the service heading 9988. This heading is described as manufacturing services on physical inputs owned by others. It covers contract manufacturing, assembly, finishing and other processing services where the inputs are supplied by the customer.
The four digit code 9988 is the broad family for most manufacturing type job work services. Inside this family, eight digit codes give more detail about the sector, such as textiles, food, metals, machinery, electronics and many others.
So when people refer to the job work HSN code, they usually mean this service group 9988 and its detailed lines, which are used to identify job work in GST registration , invoicing and return filing.
| HSN Code | Product Description | Product Type or Variant | GST Rate |
|---|---|---|---|
| 9988 | Job work services on goods owned by others | General manufacturing job work not covered by concessional entries | 18% |
| 9988 | Textile and apparel job work | Job work on textiles, garments and related textile products | 5% |
| 9988 | Food and agro product job work | Job work on notified food, agro and similar specified products | 5% |
| 9988 | Diamond job work services | Cutting, polishing and other processing of diamonds supplied by principal | 1.5% |
| 9988 | Other sector job work | Job work in metals, machinery, electronics and similar sectors (residual) | 18% |
Job Work HSN Code Eight Digit and Its Application
Within heading 9988, the eight digit codes are used to show the exact type of job work. The first two digits ninety nine show that it is a service. The next two digits eighty eight point to the manufacturing service family. The last four digits identify the sector such as food products, textiles, leather, metals or machinery.
For example, there are separate eight digit codes for textile manufacturing services, wearing apparel manufacturing services, leather product manufacturing services, wood and paper manufacturing services, metal product manufacturing services and machinery manufacturing services. Each of these codes still sits inside the main 9988 group.
When a job worker issues a GST tax invoice, they normally mention the most suitable eight digit job work code based on the type of goods they process. A unit that only does textile job work will select the textile manufacturing service code, while an engineering job worker who machines metal parts will choose a metal or machinery manufacturing service code.
Using the correct eight digit code helps the system report job work turnover by sector and also makes it easier for tax officers to understand what kind of processing is being done. It also avoids confusion between job work services and works contract or trading activities, which have different codes and tax rules.
GST on Job Work Services and HSN Code Classification
The job work HSN code decides where job work sits in the service rate table. The GST Council then fixes slab wise rates for job work in different sectors, such as textiles, food processing, diamonds and other manufacturing services.
In earlier years of GST, job work services saw a mix of rates like 5%, 12%, 18% and 1.5%, depending on the sector. Over time, these rates were rationalised. From twenty two September twenty twenty five onwards, most job work entries are aligned with the three slab model where concessional categories sit at 5%, special cases like diamond job work sit at 1.5% and residual job work that is not covered by any concession is taxed at 18%.
Textile and apparel job work, leather processing, brick manufacturing job work, certain food processing job work and some printing related job work often enjoy concessional rates around 5% under specific entries. On the other hand, general manufacturing job work that does not fall in any concessional list is usually covered by an entry that puts it in the standard 18% slab.
For a typical engineering or fabrication job worker, this means that their services under heading 9988 will normally attract 18% GST once they cross the registration threshold. Only when their activity exactly matches a notified concessional category can they apply a lower rate like 5% or 1.5%, and even then they must keep proper documents to support the treatment.
Because job work services are usually provided to registered businesses, the GST charged by the job worker is often fully available as input tax credit to the principal. This is why, in many manufacturing chains, moving residual job work from 12% to 18% does not increase the final tax cost, but it does change working capital and the rate at which tax is collected.
Job work service providers use the 9988 group and the relevant eight digit code while issuing invoices, preparing outward supply data and filing GST returns . When they declare their outward supplies in the returns, these services are captured under the service code family 9988, which helps in rate verification and audit. Accurate classification lowers the chance of disputes and notices related to undercharging or overcharging of GST on job work.
Conclusion
The job work HSN code is central to correct GST treatment of outsourced manufacturing and processing services. Most such services are grouped under the service heading 9988, with eight digit codes that point to specific sectors like textiles, metals, machinery and food processing.
When job workers map their services to the correct job work HSN code and apply the proper GST rate, usually 18% for residual entries and 5% or 1.5% for notified concessional job work, their invoices remain accurate and their customers can claim input tax credit smoothly. This supports clean GST compliance and reduces the risk of penalties linked to wrong classification or wrong rates on job work bills.
Jagdish Prasad is a Chartered Accountant with over 5 years of experience. He helps people and businesses with GST, income tax, and HSN codes. Jagdish makes sure his clients follow all tax rules and save money the right way. He also enjoys writing simple articles to help others understand taxes and stay updated with the latest rules.
Frequently Asked Questions
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What is the HSN code for job work services?
Job work services on goods are mainly classified under service heading 9988, which covers manufacturing services on physical inputs owned by others. The detailed eight digit codes within this heading identify the exact sector such as textiles, metals or machinery.
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How does the eight digit job work HSN code impact GST?
The eight digit job work code shows which sector the service belongs to and which rate entry applies. If a service falls under a notified concessional job work category, it may be taxed at 5% or 1.5%, while other manufacturing job work that uses a residual code is generally taxed at 18%.
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Are job work services taxed under a specific HSN code?
Yes. Most job work services that involve processing goods for a principal are taxed under the service family 9988. Within this family, specific eight digit codes are used for sectors such as textiles, apparel, leather, metals and machinery, and the applicable GST rate depends on the exact entry.
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What GST rates apply to job work services under HSN code?
Under the current structure, many notified job work services, such as those for certain textiles, food items and printing, attract a concessional rate around 5%, diamond job work can attract 1.5% and other residual manufacturing job work generally attracts 18%. The exact rate always depends on the latest GST notifications for that service.
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How do job work service providers use the HSN code for GST filing?
Job work service providers record the correct 9988 code in their invoices and in their billing software. They then use HSN wise reports when filing GST returns so that outward supplies, tax paid and input tax credit for their customers can all be matched correctly during assessments and audits.