No GST payable on washed/rejected coal from washery on which Compensation Cess is paid and ITC is not availed

In re Parsakente Collieries Limited (GST AAR Chhattisgarh)

No GST payable on washed/rejected coal from washery on which Compensation Cess is paid and ITC is not availed

The AAR, Chhattisgarh in the matter of M/s Parsakente Collieries Limited [Advance Ruling No. STC/AAR/08/2021 dated December 17, 2021] has ruled that nil rate of Compensation Cess is applicable on supply of coal rejects by the coal washery, as long as it arise from the raw coal on which appropriate Compensation Cess has been paid during the supply and where no Input Tax Credit (“ITC”) of the Compensation Cess so paid is availed,  in terms of Sl. 41A of Notification No. 1/2017- Compensation Cess dated June 28, 2017 (“the Compensation Cess Rate Notification”)

Facts:

M/s Parsakente Collieries Limited (“the Applicant”) is a Mine Development Operator engaged in rendering mining services entered into a Coal Mining and Development Agreement (“CMDA”) with Rajasthan Rajya Vidyut Utpadan Nigam Limited (“RVUNL”) which has been allotted a coal block by the Central Government. The Applicant also operates a Coal washery, for washing the raw coal as extracted from the mine and the coal rejects after washing the coal is the property of the Applicant.

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