Receipt of tax invoice towards inward supply necessary under ISD

JSW Steel Ltd. Vs Union of India (Orissa High Court)

In view of definition of “Input Service Distributor” contained in Section 2(61), it is necessary that the ISD as an office is required to receive tax invoices towards inward supply.

Facts- The Petitioner, being engaged in the business of manufacturing and sale of hot and cold rolled coils and sheets, galvanized coils and  sheets, and plates, it has been allotted with GSTIN 21AAACJ4323N2ZR (in the State of Odisha) and GSTIN 27AAACJ4323N2ZF (in the State of Maharashtra). In the State of Maharashtra the said registration number as ISD (Input Service Distributor) as defined under Section 2(61) of the CGST/OGST Act.

It is stated by the Petitioner that JSW Steel Ltd. (Mumbai) participated in the tender process invited by the Government of Odisha and was awarded the lease for undertaking of mining operations for iron ore blocks in the State of Odisha. In Odisha, said company has been allotted four blocks, i.e., Jajang Block, Ganua Block, Narayanposhi Block and Nuagaon Block. It is claimed by the Petitioner that iron ore extracted from the iron ore blocks is either supplied by JSW Steel Ltd. (Odisha) to JSW Plants by way of stock transfer; or to the extent permissible supplied to third parties. Accordingly, it has raised tax invoices towards both the supplies and claims to have paid applicable GST.

From the impugned Order dated 28.03.2022 it is revealed that scrutiny of returns filed for the tax periods in question depicted that JSW Steel Ltd. bearing GSTIN 21AAACJ4323N2ZR (in the State of Odisha) has paid OGST and CGST under RCM on bid premium, royalty, DMF, NMET, NPV, etc. (towards availing of licensing services for right to use minerals including exploration and evaluation in respect of four mines located inside the State of Odisha (falling under Heading 9973). Further fact delineated in the said Order shows that having utilized a portion of the tax paid on RCM, the Petitioner-company in Odisha has passed on to JSW Steel Ltd. in Maharashtra which is declared as ISD bearing GSTIN 27AAACJ4323N2ZF in shape of IGST in the garb of outward supply of facilitation services to M/s. JSW Steel Ltd. (ISD). Said fact is apparent from disclosures made in invoices, Part-B of GSTR-2A, GSTR-1 and GSTR-3B and cash ledger of the taxpayer and GSTR-6 filed by JSW Steel Ltd. GSTIN 27AAACJ4323N2ZF (in the State of Maharashtra).

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