Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 17-7-2018 – In March, 2018, Authority for Advance Ruling (AAR), Maharashtra had pronounced a ruling on job work vis-à-vis manufacture in relation to supply of goods (electricity). The advance ruling under reference is in the matter of In Re JSW Energy Ltd. [(2018) 13 GSTL 92; (2018) 5 TMI 763; ] with reference to scope of supply under section 7 of the GST law. Advance Ruling Accordingly, it was ruled that where applicant-power company i.e. JSW Energy Ltd. (JEL) generates power from coal supplied by JSL, a steel company, and JEL supplies power to Jindal Steel Ltd. (JSL), activity under taken by JEL amounts to manufacture of electricity from coal as supplied by JSL and
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aracter and use than the inputs i.e., coal . Thus, when the Legislature had provided for the definition of 'job work' as well as 'manufacture', the meaning as understood by the definition of 'manufacture' cannot be read into the words 'treatment or process' as found in the definition of 'job work'. 'Treatment', Process' and 'Manufacture' are three different activities recognized by the Legislature. The intent of the Legislature was to restrict the scope of 'job work' to 'treatment' or 'process' and not to extend the same to 'manufacture'. It was therefore, held that the activity undertaken by JEL amounted to manufacture of electricity from the coal a
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electricity, the Authority decided the same as supply of goods and not as job work. The main ground for decision of the Authority lies in the fact that definition of job work covers process and treatment on goods, whereas in the instant case the operations carried out by JEL are beyond the process and treatment, and thus not covered under the definition of job work. The Appellate Authority discussed in detail the interpretation on meaning of job work and manufacture and whether activity involved was supply of goods and/or job work or not. The Appellate Authority concluded that the activity undertaken by JEL to convert coal, to be supplied by JSL, in electricity is not covered under the definition of job work in terms of the CGST Act. Since
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