9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (12) TMI 193 - AAAR - GSTJob-work or not - sending of inputs (Naphtha, DM water, Power, Cooling water, service water and instrument air) by the Appellant to M/s. Praxair India Private Limited and receiving back of industrial gases (Hydrogen gas, Nitrogen gas and HP steam) under the lease agreement - levy of GST on all the payments under the lease agreement - HELD THAT - The job work charges are not mentioned in the invoices raised to the Appellant for the service rendered, During the Personal Hearing, we put this question to the authorized representatives again and again, but the authorized representatives could not clarify the said deficiency properly nor could they produce any agreement or part of the agreement clearly explaining about the job work charges in the invoice. As per Section 2(68) of CGST Act, 2017 read with section 143 of CGST Act, 2017 defines the meaning of the term job work and explains Job Work procedure . However, on this procedural part as defined under the said provision, Advance Ruling Authority, Odisha has not raised any questions on the subject issue; But the Advance Ruling Authority, Odisha has objected that in addition to the procedural part, there should be specific job work agreement and job work charges should be clearly mentioned and raised in their invoices. The activities undertaken in the Appellant s premises or production plant do not qualify for Job Work under section 2(68) of the Central Goods and Service Tax Act, 2017 (CGST Act) - Ruling of the Advance Ruling Authority, Odisha, is in tune with legal provisions of the Act and it needs no interference. Appeal allowed.
Issues Involved:
1. Whether the transaction qualifies as 'job work' under Section 2(68) of the CGST Act, 2017 and OGST Act, 2017. 2. Whether all payments under the lease agreement attract GST as applicable to job work. Detailed Analysis: Issue 1: Qualification as 'Job Work' The primary issue is whether sending inputs (Naphtha, DM water, Power, Cooling water, service water, and instrument air) by the Appellant to M/s. Praxair India Private Limited and receiving back industrial gases (Hydrogen gas, Nitrogen gas, and HP steam) under the lease agreement qualifies as 'job work' under Section 2(68) of the CGST Act, 2017 and OGST Act, 2017. Findings: - The plant is leased to the Appellant for 15 years, indicating that it is not under the control and possession of M/s. Praxair India Private Limited. - There is no specific job work agreement between the Appellant and M/s. Praxair India Pvt Ltd. - No job work charges or processing/conversion charges of inputs have been claimed by M/s. Praxair, as evident from the invoices raised to the Appellant. - M/s. Praxair raises six invoices each month for the service rendered under the agreement, categorized into fixed lease charges, fixed operation & maintenance charges, and variable operation & maintenance charges. Conclusion: The activities undertaken in the Appellant's premises/production plant do not qualify for 'Job work' under Section 2(68) of the CGST Act, 2017 and OGST Act, 2017. The agreement between the Appellant and M/s. Praxair is a simple lease agreement where M/s. Praxair has no control and possession over the place where the inputs supplied by the Appellant are processed. Issue 2: GST Applicability on Payments The secondary issue is whether all the payments under the lease agreement attract GST as applicable to job work. Findings: - Since the transaction does not qualify as 'job work,' the question of whether payments under the contract attract GST as applicable to job work is not maintainable. - The Appellant's claim that the agreement is a job work agreement is not supported by the facts, as there is no job work agreement or job work charges mentioned in the invoices. Conclusion: The payments made by the Appellant to M/s. Praxair under the lease agreement do not attract GST as applicable to job work, as the transaction does not qualify as 'job work.' Final Order: The Appellate Authority confirms and upholds the order of the Odisha Advance Ruling Authority, issued vide order No. 03/ODISHA-AAR/2021-22 dated 15-12-2021, and disallows the appeal of the Appellant, M/s Indian Oil Corporation Limited, Paradip Refinery, Jagatsinghpur, Odisha.
|
