In re Petronet LNG Ltd. (GST AAR Gujarat)
Activity of re-gasification of LNG owned customers, amounts to rendering of service by job work
The AAR, Gujarat in the matter of M/s. Petronet LNG Ltd. [Advance Ruling No. GUJ/GAAR/R/40/2021 dated August 11, 2021] held that, assessee’s activity of re-gasification of LNG owned by its customers, amounts to rendering of service by Job Work and leviable to GST @ 12%.
Facts:
M/s. Petronet LNG Ltd. (“the Applicant”) provides regasification services to its customers on the Liquefied Natural Gas (“LNG”) owned by the customers, referred as ‘Tolling’. In the ‘Tolling Model’, the Applicant receives the LNG belonging to the customers at their plant, stores it, re-gasifies it and supplies Regasified Liquefied Natural Gas (“RLNG”) to the customers. The Applicant enters into Re-gasification Agreements (RAs) with the customers, that includes reception of LNG ships at the unloading port, receipt by ship at the custody transfer point, storage and re-gasification of LNG, transportation and delivery of RLNG to the customer at the custody transport point through pipelines which are connected through Applicant’s plant.
Issue:
Whether the Applicant’s activity of providing service of regasification of LNG owned by its customers to convert to RLNG, from its plant would amount to rendering of service by way of Job Work under the Central Goods and Services Tax Act, 2017 (“CGST Act”)?
Held:
The AAR, Gujarat in Advance Ruling No. GUJ/GAAR/R/40/2021 dated August 11, 2021 held as under:
