Activity of re-gasification of LNG owned customers, amounts to rendering of service by job work

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.

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