Case Law Details
In re M/s. Bharat Petroleum Corporation Limited (GST AAR Kerala)
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. 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 explain the procedure to be followed in the case of job work transaction. A registered taxable person may, under intimation, send any inputs without payment of tax to a job worker for job-work and bring back inputs after completion of job work or otherwise, within one year of their being sent out, to any of the place of business without payment of tax.
The industrial gases are produced out of the major materials or inputs supplied by the applicant. The job worker uses some minor, ancillary goods to complete the process. The application of minor items by the job worker would not detract it being a job work. Therefore the processing undertaken by M/s. Prodair Air Products on the goods belong to the applicant, another registered person qualifies as job work even if it amounts to manufacture.
In the light of the discussion above, we come to the conclusion that the transport of the inputs from principal for processing through pipe lines to the premises of job worker as well as return of processed goods after job work to the principal can’t be treated as taxable supply. Based on the observations stated above, the following rulings are issued:
i) 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 Prodcts 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.
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