In re Shell Energy India Private Limited (GST AAR Gujarat)
Q1. Whether the Applicant’s activity of providing service of re-gasification of LNG owned by its customers (who are registered under the CGST Act) to convert to RLNG, from its re-gasification terminal at Hazira Port, Gujarat would amount to rendering of service by way of job work as defined under Section 2(68) of the Central Goods and Services Tax Act, 2017 (‘CGST Act’)?
Q2. If yes, then whether the said re-gasification service by way of job-work be classifiable under Entry (id) of Heading No. 9988 of Sl. No. 26 of Notification No. 11/2017-CT (Rate) dated 28.06.2017 as amended vide Notification No. 20/2019-CT (Rate) dated 30.09.2019 and eligible for GST at the rate of 12%?
Held by AAR
Shell’s activity of re-gasification of LNG owned by its GST registered customers amounts to rendering of service by way of Job Work and merits to be covered at entry (‘id’) of Heading 9988 at SI. No. 26 of Notification No. 11/2017-CT (Rate) dated 28.06.2017, as amended, liable to CGST at 6% and SGST at 6%.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, GUJARAT
Shell Energy India Private Limited (herein referred to as the Applicant) has submitted that it provides LNG re-gasification services to its customers and that the LNG is owned by its customers who are all GST registered Taxpayers.
2. Question on which Advance Ruling sought:
1. Whether the Applicant’s activity of providing service of re-gasification of LNG owned by its customers (who are registered under the CGST Act) to convert to RLNG, from its re-gasification terminal at Hazira Port, Gujarat would amount to rendering of service by way of job work as defined under Section 2(68) of the Central Goods and Services Tax Act, 2017 (‘CGST Act’)?
2. If yes, then whether the said re-gasification service by way of job-work be classifiable under Entry (id) of Heading No. 9988 of SI. No. 26 of Notification No. 11/2017-CT (Rate) dated 28.06.2017 as amended vide Notification No. 20/2019-CT (Rate) dated 30.09.2019 and eligible for GST at the rate of 12%?
Personal Hearing:
3. Personal hearing granted on 18-2-22 was attended by Shri Sujit Ghosh, Advocate and Abhishek Nolkha, Senior Tax Advisor and they reiterated the submission.
Revenue’s Submission
4. Revenue has neither submitted its comments nor appeared for hearing
FINDINGS
5. We have carefully considered the submissions made by the applicant.
6. We note that Job-work, as per Section 2(68) of CGST Act, is defined as-
“Job works means any treatment or process undertaken by a person on goods belonging to another registered person and the expression job worker shall be construed accordingly”.
7. We note that the subject activity of re-gasification of LNG into RLNG is undertaken by M/s. Shell Energy on LNG belonging to another GST Registered person. We note that LNG is goods classified at HSN 2711. Thereby, we hold that subject activity merits to be covered at entry (‘id’) of Heading 9988 at SI. No. 26 of Notification No. 11/2017-CT (Rate) dated 28.06.2017, as amended.
8. Further, we find that the Government Circular 126/45/2019-GST dated 22-11-19 has clarified this issue crystal clear.
9. We, therefore, issue the Ruling:
RULING
Shell’s activity of re-gasification of LNG owned by its GST registered customers amounts to rendering of service by way of Job Work and merits to be covered at entry (‘id’) of Heading 9988 at SI. No. 26 of Notification No. 11/2017-CT (Rate) dated 28.06.2017, as amended, liable to CGST at 6% and SGST at 6%.
