In re JSW Energy Limited (GST AAR Maharashtra)
Also Read AAAR Ruling- Conversion of Coal supplied in Electricity is Manufacture not Job work: AAAR Maharashtra
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, MAHARASHTRA
M/s. JSW Energy Limited (JEL), the applicant, seeking an advance ruling in respect of the applicability of GST on:
1. Supply of coal or any other inputs on a job work basis by JSL to JEL
2. Supply of power by JEL to JSL
3. Job work charges payable to JEL by JSL
APPLICABILITY OF GST ON THE PRESENT TRANSACTION
4.15. On establishing a job work arrangement between JSI, and JEL as per above, the applicability of GST on the subject transaction also needs to be examined. For the said purpose, reference is sought to Section 143(1) of the COST Act which allows movement of inputs or capital goods without payment of tax, to a job worker for job work activities. Accordingly, it is humbly submitted that movement of coal or any other inputs from JSL to JEL would not be subjected to tax on account of movement of inputs for job work activities.
4.16. As mandated under a job work arrangement, the Principal shall be required to bring back inputs after completion of job work or otherwise, within a period of one year of they being sent out without payment of tax. In the said context, the Applicant has submitted under paragraphs 4. 10 to 4.12 of this Application that the subject transaction is in accordance with the prescribed conditions of the job worker arrangement whereby inputs ( i.e. coal) is being returned to the Principal.
4.17. For determining the applicability of GST on Job Work charges, reference is sought paragraphs 4.13 and 4.14 of this document, In the said context, it is humbly submitted that ajob worker is engaged in supplying a service specified under Schedule II of the COST Act and accordingly OST would be applicable on the said job worker charges.
4.18 In addition to the above, for the purpose of determining the value of job work charges subject to GST, reference is sought to Rule 28 of the COST Rules mentioned under paragraphs 2.9 and 2,10 of this application, which pertains to valuation of supplies between related persons. As per the said rules, the value of supply of services would be the open market value of such supply. This term has been explained to mean the full value in money, excluding the integrated tax, central tax, State tax, Union territory tax and the cess payable by a person in a transaction, where the supplier and the recipient of the supply are not related and the price is the sole consideration, to obtain such supply at the same time when the supply being valued is made. Accordingly, it is submitted that GST would be applicable on the job work charges levied by JEL to JSL.
OBSERVATIONS
