In re Bisra Stone Lime Company Limited (GST AAR Odisha)
The Authority for Advance Ruling, Odisha, examined whether the activity undertaken by a contractor involving crushing, screening, sizing, and grading of limestone/dolomite amounts to “manufacture” under Section 2(72) of the CGST Act, 2017. The applicant, a government-owned mining company, had engaged a contractor to process raw minerals extracted from its mines into usable forms. The applicant contended that the activity resulted in a new, marketable product and therefore qualified as manufacture, relying on statutory provisions and judicial precedents.
At the outset, the Authority considered the admissibility of the application, as the question related to services provided by a contractor rather than the applicant. It referred to judicial precedents which clarified that a recipient of services may also seek an advance ruling if its tax position is directly affected. Based on this, the application was admitted for consideration on merits.
The core issue was whether the processing of limestone/dolomite results in the emergence of a new product with a distinct name, character, and use, as required under Section 2(72). The applicant argued that the processed output was commercially distinct and marketable, and that the contractor bore operational and commercial risks, indicating manufacturing activity.
