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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 ..... 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. The activities being undertaken in the applicant's premises/production plant do not qualify for 'Job Work' under section 2(68) of Central Goods and Service Tax Act.2017 (CGST Act) and Odisha Goods and Service Tax Act, 2017 (OGST Act) and Section 143 of the said Acts - the applicant's next question Whether all the payments under the contract will attract GST as applicable to Job Work? is not maintainable. - ORDER NO.03/ODISHA-AAR/2021-22/ - - - Dated:- 15-12-2021 - SRI GOPAL KRISHNA PATI, IRS, AND SRI HRUSHIKESH MISHRA, OFS(SAG), MEMBER Present for the Applicant in personal hearing : Biswadipak Mohanty, SFM S Behera, GM ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustrial Gases'). Industrial Gases can be obtained from inputs such as Naphtha and other utilities such as Demineralised water ('DM water'), Power, Cooling water, service water, instrument air etc. 2.3 That pursuant to a tender floated by Applicant, Praxair India Private Limited ( Praxair ) was awarded with the contract for installation, lease, operation and maintenance of inter alia, a Hydrogen Reformer Plant ( H2 Plant ) Nitrogen Plant ( N2 plant ) inside the premises of IOCL at Paradip, Orissa. Praxair had installed the Hydrogen and Nitrogen gas plant inside the Applicant premises at Paradip. 2.4 That under this agreement, all the inputs required for the manufacture of Industrial gases shall be supplied by the Applicant and the resultant producing Industrial gases will be sent back to the applicant by Praxair for the exclusive utilization in the refinery processes. All the input and output products received and processed by Praxair is transferred to the Applicant through Pipeline. The ownership of the input and output products shall always remain with the Applicant only. 2.5 That the activity under BOO contract between the Applicant and Praxair is s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hip always remains 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. Accordingly, condition (c) with respect to ownership of goods will also be satisfied in the proposed transaction. 2.10 That in the present activity, the goods are brought back within 1 year from the date of sending the Inputs. Accordingly, the condition under Section 143 with respect to bringing back the goods will be satisfied in the proposed arrangement. 2.11 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 transaction. 2.12 That the applicant relies upon the judgment of the Gujarat Authority for Advance Ruling ('AAR') in the case of Inox Air Products Private Limited [2018 (14) GSTL 147 (AAR-GST)]. In that case, the applicant, Inox Air Products Private Limited ('Inox PAP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re us essentially pertains to 'Determination of the liability to pay tax on any goods or services or both' and therefore, we observe that the issue before us is squarely covered under Section 97(2) of the CGST Act, 2017. Therefore we admit the application for consideration. 4.2 The main issue involved in this case is whether sending of Raw Materials (Naphtha, DM water, Power, Cooling water, service water and instrument air) for manufacture of Industrial Gas (i.e Hydrogen gas, Nitrogen gas and HP steam) by the Applicant in M/s. Praxair and receiving back of the said Industrial Gas 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). In this regard, the applicant submitted that following pre-requisites need to be satisfied for an activity to be 'Job work'.- (a) There must be treatment or process (b) Treatment or process is undertaken on goods (c) Goods must be owned by principal (d) Goods must be brought back within one year in case of input (e) The Goods sent by the principal to the job worker qualities a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that sending of inputs to job worker and bringing back the processed converted gas fulfills the term' job work' defined under Section 2(68) read with Section 143 of the CGST OGST Acts. Further, it has also been stated that since Praxair collects job work charges or processing charges, the principal would be liable to pay agreed job charges to the job worker along with GST @18% vide HSN 9988. 4.5 The authority (AAR) has examined the issues scrupulously. During personal hearing, the applicant was asked to submit Lease Agreement for Hydrogen and Nitrogen Gas Plant, Operation and Maintenance for hydrogen and Nitrogen Plant and some sample invoices raised by M/s Praxair to the applicant. The Applicant vide its letter dated 21.09.2021 has submitted the same. 4.6 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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