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TMI Blog2022 (3) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in respect of the following questions.- (a) Whether sending of Naphtha, DM water, Power, Cooling water, service water and instrument air by the Applicant to Praxair and receiving back of Hydrogen gas. Nitrogen gas and HP steam under the contract will fall under 'job work' in terms of section 2(68) of Central Goods and Service Tax Act,2017 (CGST Act) and Odisha Goods and Service Tax Act, 2017 (OGST Act). (b) Whether all the payments under the contract will attract GST as applicable to Job Work? 1.1 At the outset, we would like to make it clear that the provisions of both the CGST Act and the OGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the OGST Act. 2.0 Submission of the Applicant 2.1 That the Applicant is a Government of India undertaking having its registered office in Mumbai. The Applicant has obtained Goods and Service Tax (GST) registration in the state of Odisha bearing registration no 21AAACI1681G1Z1 for its Refiner) business and 21AAACI1681G6ZW for its Petrochemical business. The Applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the GST regime. Hence, it is evident that the scope of 'job work' includes 'manufacture' as well. Under the Central Excise regime, it was a settled position in law that job work activity could very well amount to manufacture. The decision of the Supreme Court in the case of Ujagar Prints & Ors. {1987 /27/ ELT 567 (SC)} and that of the Mumbai Tribunal in the case of Eaton Fluid Power Ltd. {2014 (308) E.L.T 602 (Tri. - Mumbai)} are relevant from this perspective. The Mumbai Tribunal in the Eaton case (supra) specifically commented that a job work might amount to "manufacture" or might not amount to "manufacture'. The proposed activity will be covered under the ambit of 'process' or 'treatment' even if such process amounts to manufacture. 2.8 That in the present instance, the Applicant sends Inputs to Praxair. All these items are not immovable in nature. Further, all these items are owned by the Applicant. Hence, Inputs would fall within the ambit of 'movable property' and consequently goods. Similarly, the Industrial Gases dispatched by Praxair possess all the attributes of moveable property and are hence covered in the ambit of 'goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rich off Gas and Raw water to M/s Prodair Air Products Pvt Ltd and receives back Industrial Gases such as Hydrogen, Nitrogen and Steam. The Kerala AAR has held that the activity between BPCL and M/s Prodair Air Products Pvt Ltd amounts to 'Job work' under section 2(68) of CGST/KSGST Acts. 2.14 That the activity by Praxair would fall under the ambit 'Job work' under section 2(68) of CGST Act and OGST Act and GST @ 12% under heading 9988 as per SI. no. 26 (id) of Notification No. 11/2017-Central Tax (Rate) will be applicable. 3.0 Personal Hearing 3.1 The personal hearing was held on 08.10.2021. Sri Biswadipak Mohanty, SI M & Sri S Behera, GM(F) of M/s IOCL appeared hearing. During P.H. Sri Mohanty. SFM reiterated the submissions already furnished in the annexure to the application. He explained / submitted the activities being undertaken in its registered premises. He further submitted additional submissions in relation to the questions on hand. During P.H., Sri Mohanty, SFM has also discussed about the relevant clauses of the agreement made between applicant & M/s Praxair. 4.0 Discussions and Findings 4.1 We have considered the submissions made by the applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... auses Act, 1897. Under this provision, all property other than immovable property is considered to be movable property. 'Property' refers to anything that is owned by a person. In the present instance, the Applicant sends Inputs to Praxair. All these items are not immovable in nature. Further, all these items are owned by the Applicant. Hence, Inputs would fall within the ambit of 'movable property' and consequently goods. Further, property in all goods (Inputs sent and Industrial Gases received back) always vest with the Applicant. Praxair is only obliged to undertake the job work processing on the goods. At no point in time does the ownership in goods vest with Praxair. The applicant further submits that the goods are brought back within 1 year from the date of sending the Inputs. It has also been submitted that the phrase 'Inputs' as defined under the GST Law is wide enough to cover all goods directly or indirectly used in the business of the assesse. Hence, the Inputs sent by the Applicant to Praxair would squarely fall within the ambit to this definition. Consequently, even condition for a 'job work' activity is fulfilled by the proposed transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 4.8 The applicant in its original application as well as in its additional submission has cited the judgment of the Gujarat Authority of Advance Ruling in the case of Inox Air Products Private Limited [2018 (14) GSTL 147 (AAR-GST)] and the decision of Authority for Advance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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