In Re: M/s. Bharat Petroleum Corporation Limited
GST
2018 (10) TMI 1516 – AUTHORITY FOR ADVANCE RULINGS, KERALA – 2018 (19) G. S. T. L. 119 (A. A. R. – GST), [2019] 67 G S.T.R. 136 (AAR)
AUTHORITY FOR ADVANCE RULINGS, KERALA – AAR
Dated:- 20-10-2018
AAR No. KER/21/2018
GST
SHRI B.G. KRISHNAN IRS AND B.S. THYAGARAJABABU MEMBER
Authorized Representative: Adv. Abhishek A Rastogi.
The applicant is d Public sector undertaking operating oil refinery and producers of several petroleum products. For carrying out the refining activity of petroleum products. the applicant requires industrial Gases such as Hydrogen, Nitrogen and Steam. he industrial Gases ate obtained from inputs such us 'Re-gasified Liquefied Natural (Gas (RLNG). De-mineralized water (DM Water), Hydrogen Rich oft Gas and raw water'. The applicant allowed M/s. Prodair Air Products Pvt. Ltd. to put up a facility for processing of industrial gases on Build Own Operate basis. The applicant transport the input
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Products Pvt Ltd on free of cost basis. Hence all inputs will continue to be the property of the applicant. Re-gasified Liquefied Natural Gas (RLNG) is the major input which is coming outside the ambit of the GST. Being a job work M/s. Prodair Air Products Pvt Ltd will process the inputs received from the applicant and convert them into industrial gases. They use some minor, ancillary goods to complete the processing. The applicant will have ownership over the industrial gases. As the inputs as well as outputs are transported through pipeline, there is no requirement of e-Way Bill. M/s. Prodair Air Products Pvt Ltd will collect job work or processing charge along with applicable GST @ 18% vide HSN 9988, manufacturing services on physical inputs owned by others. The processing charge realized by the job worker is significantly lower than the market value of industrial gases. The applicant will use the entire quantity of industrial gases tor producing their output of petroleum products.
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G), De-mineralized water (DM Water), Hydrogen Rich off Gas and raw water' to M/s. Prodair Air Products for treatment or process. M/s. Prodair Air Products who is treating or processing the goods belonging to the applicant is called 'job worker' and the person to whom the goods belongs, i.e., applicant is called 'principal'.
These inputs subject to particular process by the Job worker converted in to Industrial gas and returned to the principal. It is settled position of law job work is activity which may or may not tantamount to manufacture. A job worker may undertake manufacturing of goods on account of others from the inputs supplied to him free of cost, and realize job work charges on return of the goods so manufacture or processed. In such a scenario the job worker alone has the liability to pay tax on the job work charges realized.
Job work is defined under Section 2(68) as any treatment. or process undertaken by a person on goods belonging to another registered taxable person.
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