Case Law Details
In re M/s. IOCL (GST AAR Odisha)
On perusal of the documents and submissions submitted by the applicant, it is seen that the applicant has entered into an agreement with M/s Praxair for construction of Hydrogen and Nitrogen Gas Plant inside the applicants premises at Paradip. Pursuant thereto, M/s Praxair had constructed, installed and successfully commissioned the Hydrogen and Nitrogen Gas Plant inside the applicants premises. M/s Praxair then leased the said plant for a period of 15 years to the applicant for the consideration reserved on the terms and conditions of the contract/ agreement. As per the contract/agreement, M/s Praxair is charging lease/rental charges and O & M charges for Nitrogen and Hydrogen Plant. Scrutiny of the sample invoices revealed that M/s Praxair is raising invoices for fixed lease charges for Nitrogen and Hydrogen plant under SAC code 997212 (GST Rate 18%), fixed operation and maintenance charges for Nitrogen and Hydrogen plant under SAC code 998717. (GST Rate 18%) and for Variable operation and maintenance charges for Nitrogen and Hydrogen plant under SAC code 998717. (GST Rate 18%).
It would be relevant to note that the production ‘Plant’ has been leased to the applicant (M/s IOCL, Paradip in the instant case) on a monthly rent basis. The physical and peaceful possession of the production plant has been handed over to the applicant and for that the applicant is paying Lease/Rental and O&M charges to M/s Praxair. The Plant is no more under the control and possession of M/s Praxair. Therefore, the applicant’s claim that M/s Praxair uses its Plant to produce Hydrogen and Nitrogen Gas by using the inputs provided by the applicant may not be correct. Admittedly, M/s Praxair is manufacturing industrial gases out of the raw material supplied by the applicant and the gases so manufactured are exclusively used by the applicant. But, there is no specific job work agreement between the applicant and M/s Praxair . No job works charges or any processing/conversion charges of inputs has been claimed by M/s Praxair as evident from the invoices raised to the applicant. Further, the manufacturing of gases is not being done at M/s Praxair’s ‘ production plant’. Therefore, the concept of ‘Job Work’ is not present in the entire transaction.
AAAR Order: Job work charges should be clearly mentioned in invoices: AAAR
FULL TEXT OF THE ORDER OF AUTHORITY OF ADVANCE RULING, ODISHA
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