What HSN Code 7323 Covers and Why It Applies to Buffing Job-Work
HSN (Harmonised System of Nomenclature) Code 7323 classifies "Table, kitchen or other household articles and parts thereof, of iron or steel" under the GST framework. This covers stainless steel utensils, cookware, hotelware, catering equipment, and their components -- which is the exact category of goods that manufacturers send to Raja Buffing Works for finishing.
When a manufacturer sends semi-finished or finished utensils to our Vasai East facility for buffing, polishing, or matte finishing, the transaction is classified as job-work under GST -- not a sale. This distinction is fundamental to understanding how the tax liability works and why B2B manufacturers are eligible to claim input tax credit on the job-work service charge.
Job-work under GST is defined under Section 2(68) of the CGST Act as "any treatment or process undertaken by a person on goods belonging to another registered person." In a buffing job-work arrangement, the manufacturer (principal) retains legal ownership of the utensils throughout the process. Raja Buffing Works performs a service on those goods and returns them. The goods never change hands for GST purposes -- only the service charge is taxable.
GST Rate on Job-Work Services for Utensils
Job-work services for goods classified under Chapter 73 (iron and steel articles, including HSN 7323 utensils) attract GST at 12% under SAC (Service Accounting Code) 9988. This is the applicable rate for manufacturing services on physical goods owned by a client -- which is precisely how buffing job-work is classified.
The practical implication: if your buffing job-work invoice from Raja Buffing Works is ₹1,00,000, the GST component at 12% is ₹12,000. As a registered B2B manufacturer, you can claim this ₹12,000 as input tax credit against your output GST liability. Effectively, the net cost of the buffing service to you is ₹1,00,000 -- the GST component is recovered through ITC, provided the documentation requirements are met.
GST on job-work services is split between CGST and SGST for intra-state transactions (both parties in Maharashtra) at 6% each, totalling 12%. For inter-state transactions (manufacturer outside Maharashtra), IGST at 12% applies on the full service value.
Input Tax Credit Eligibility: What You Can and Cannot Claim
ITC eligibility on job-work services is governed by Section 19 of the CGST Act and Rule 45 of the CGST Rules. The conditions for claiming ITC on buffing job-work are:
- You are a registered GST taxpayer with a valid GSTIN. Unregistered principals cannot claim ITC on job-work services.
- The goods sent for job-work are inputs or capital goods used in your manufacturing process. Semi-finished utensils sent for buffing qualify as inputs.
- You maintain a delivery challan for the goods sent to the job-worker and their return. The challan must include the description, quantity, and value of goods, and the GSTIN of both parties.
- The goods are returned within the prescribed time limit -- 1 year for inputs, 3 years for capital goods. Goods not returned within this period are treated as a supply from the job-worker and GST becomes payable by the principal.
- The job-worker's invoice is filed in GSTR-1 and the ITC appears in your GSTR-2B before you claim it in GSTR-3B.
ITC cannot be claimed if the goods are used for exempt supplies, personal consumption, or if the job-work invoice contains errors that prevent matching in the GST portal. This is why invoice accuracy -- correct GSTIN, correct HSN/SAC code, correct taxable value -- is essential on every Raja Buffing Works job-work document.
Delivery Challans: The Document That Makes ITC Work
The delivery challan is the foundational document for job-work compliance under GST. Under Rule 55 of the CGST Rules, a delivery challan must be issued when goods are sent for job-work, and it must contain:
- Date and challan number (sequential, separate series from tax invoices)
- Name, address, and GSTIN of the consignor (manufacturer/principal)
- Name, address, and GSTIN of the consignee (job-worker -- Raja Buffing Works)
- HSN code of the goods being sent (7323 for utensils)
- Description, quantity, and value of goods
- Taxable value and applicable GST rate (if the transaction involves a tax payment)
- Place of supply
- Signature of the consignor or authorised person
Two copies of the delivery challan travel with the goods to our Vasai East facility. One copy is retained by us as the job-worker. When we return the finished goods, a return delivery challan accompanies the batch back to you. Your accounts team reconciles the outward and return challans to confirm the goods movement cycle is complete -- which is the audit trail required if your ITC claim is queried by the GST department.
A common compliance error we see from new B2B clients is treating the job-work invoice as the primary document and issuing the delivery challan as an afterthought. The correct approach is the reverse: the delivery challan is issued first, when the goods leave your premises, and the job-work tax invoice is issued by Raja Buffing Works when the service is completed and the goods are returned.
How Raja Buffing Works Invoices Job-Work Under HSN 7323
Every job-work order completed at our Vasai East facility is invoiced under SAC 9988 (manufacturing services on physical goods owned by others) with the goods classified under HSN 7323. Our tax invoices include:
- Our GSTIN (Maharashtra-registered)
- Your GSTIN as the principal/client
- SAC code 9988 for the job-work service
- Description of service: buffing, polishing, or matte finishing as applicable
- Quantity of pieces processed
- Taxable service value
- GST at 12% (CGST 6% + SGST 6% for Maharashtra clients)
- Reference to the delivery challan number under which goods were received
This invoice structure is designed to be directly uploadable into your GST reconciliation process. The challan reference on the invoice allows your accounts team to match the service charge back to the goods movement document without manual cross-referencing.
For mixed-grade batches (SS 202, SS 304, SS 316 in one consignment), the invoice itemises each grade category separately with its corresponding piece count and service value. This granularity is useful for manufacturers whose own costing is tracked at the grade level.
Export Documentation: HSN 7323 for US and EU Buyers
Manufacturers exporting buffed utensils to the United States, European Union, or Middle Eastern markets face an additional documentation requirement: the surface finishing process must be verifiable against the product's classification in the destination customs system.
In the EU, stainless steel cookware and kitchenware imports are classified under CN Chapter 7323 (mirroring the HSN code). Customs clearance for premium cookware often requires a statement of manufacturing process, which includes the finishing operations performed. For export shipments where the buyer requires surface finish documentation, we provide a technical batch report confirming:
- The finishing process applied (mirror polish, matte specialist, or dual-finish)
- The SS grade processed
- The Ra value achieved (for matte specialist batches)
- The number of pieces in the batch
- The date of processing at our Vasai East facility
This report can be attached to your export documentation as evidence of the finishing stage in the manufacturing chain. For buyers who specify Ra values in their purchase orders -- common for EU premium cookware brands -- the Ra verification data from our batch report satisfies the contractual quality evidence requirement at the destination port.
For commercial utensil job-work batches destined for export, request the technical batch report when placing your order. There is no additional charge for this documentation.
Compliance Checklist for Manufacturers Using Buffing Job-Work
Before sending your first batch to Raja Buffing Works -- or auditing your existing job-work compliance -- run through this checklist:
- GST registration confirmed -- your GSTIN is valid and active. Provide it at the time of placing your first order.
- Delivery challan series set up -- your accounts team has a separate challan number series for job-work movements. Do not use your tax invoice series for challans.
- Challan issued before goods leave your premises -- not after arrival at the job-worker. The challan date must precede the goods movement date.
- Return timeline tracked -- inputs must be returned within 1 year. Set a calendar reminder per batch if your production cycle is long.
- Invoice matching confirmed in GSTR-2B before claiming ITC in GSTR-3B. Do not claim ITC on invoices not yet reflected in your 2B.
- Technical batch report requested for export batches at the time of order placement.
For manufacturers new to job-work under GST, we recommend consulting your GST practitioner with the specific SAC 9988 and HSN 7323 classification before the first batch. The framework is straightforward once set up, but the initial documentation structure needs to be correct to avoid ITC reversal queries later. Our complete guide to the commercial utensil polishing service covers the operational side of bulk job-work batches, including mixed-grade consignment handling and dispatch logistics.