GST job work on galvanising: return of processed goods satisfies input-return rule, while exhausted consumables are not treated as supply.

Under the GST job-work framework, galvanising undertaken as an intermediate manufacturing process was treated as job work, and return of the galvanised structures was taken to satisfy the requirement of return of inputs under section 143(1)(a) read with the Explanation to section 143. The provision was read as covering return of the goods after the intermediate process, not physical return of every constituent. Zinc, furnace oil and similar consumables exhausted in the process were treated as used-up inputs that need not be separately returned, because they are consumed or embedded during galvanising. On that basis, such exhausted consumables were not to be treated as a supply under section 143(3) when the processed goods were returned.

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Issues: Whether goods sent for galvanising and returned as galvanised structures satisfy the requirement of receipt back of inputs under section 143(1)(a); and whether zinc, furnace oil and similar consumables exhausted in the galvanising process, though not physically returned, are to be treated as supply under section 143(3).

Analysis: Galvanising was treated as a job work process and an intermediate stage in the applicant's manufacturing activity. The return of the galvanised structures was held to amount to return of the inputs within the meaning of section 143(1)(a), read with the Explanation to section 143, because the provision contemplates return of the goods after the intermediate process. The goods such as zinc and furnace oil were found to be consumed or embedded in the process and not capable of separate physical return. The statutory scheme was read as not requiring physically identical return of consumables that are exhausted in the process, so long as the galvanised goods are returned. The reasoning also drew support from the principle that goods used up in the process do not cease to be covered merely because they are not separately identifiable on return.

Conclusion: Return of the galvanised goods satisfies section 143(1)(a), and the consumables exhausted in galvanising are not to be treated as supply under section 143(3) if they have been entirely used up in the process.

Ratio Decidendi: Under the GST job-work framework, the return of the processed goods is sufficient compliance with section 143(1)(a), and consumables exhausted in the process need not be physically returned to avoid treatment as supply under section 143(3).

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