2018 (10) TMI 1516 – AUTHORITY FOR ADVANCE RULINGS, KERALA – 2018 (19) G. S. T. L. 119 (A. A. R. – GST) – Levy of GST – Job-work – supply or not – supply of Re-gasified Liquefied Natural Gas (RLNG), de-mineralized water (DM Water), Hydrogen Rich off Gas and raw water etc – applicability of Section 143 of GST – buy back of Hydrogen, Nitrogen and Steam (Industrial Gases) without payment of GST.
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Held that:- 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.
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The essential requirement to be fulfilled to establish a transaction as job work is the treatment or process undertaken on the goods belonging to another. Section 143 of GST Law e
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be treated as taxable supply.
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Ruling:- The activity of the applicant of sending Regasified Liquefied Natural Gas (RLNG), De-Mineralized Water (DM Water), Hydrogen Rich off Gas and Raw water free of cost to M/s. Prodair Air Products Pvt. Ltd. For manufacture of Hydrogen, Nitrogen and Steam manufactured out of its amount to ‘job work’ as defined under Section 2(68) read with Section 143 of the CGST/ KSGST Acts. – AAR No. KER/21/2018 Dated:- 20-10-2018 – 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 applic
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ons in terms of Section 143 of GST? The authorized representative of the applicant was heard. It is stated that applicant supply all inputs to M/s. Prodair Air 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 lo
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er GST. The authority hay. examined the issues meticulously. The applicant being principal sent the goods such as Re-gasified Liquefied Natural Gas (RLNG), 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
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