LNG Re-gasification for Registered Customers Qualifies as Job Work Under Section 2(68) of CGST Act

The AAR ruled that re-gasification of LNG owned by GST registered customers constitutes job work under Section 2(68) of CGST Act, 2017. The service involves treatment of goods (LNG classified under HSN 2711) belonging to another registered person. The Authority classified this service under Heading 9988 at Sl. No. 26 of Notification No. 11/2017-CT (rate), making it liable for CGST at 6% and SGST at 6%. The ruling relied on Government Circular 126/45/2019-GST to support the classification and tax liability determination.

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Issues:
1. Whether providing re-gasification services of LNG owned by GST registered customers amounts to job work under CGST ActRs.
2. If yes, whether the service is classifiable under specific notification and eligible for GST at a particular rateRs.

Analysis:
The case involved an application seeking an advance ruling on the classification and tax liability of providing LNG re-gasification services to customers owning the LNG. The applicant in question, Shell Energy India Private Limited, highlighted that the LNG belonged to its customers who were all GST registered taxpayers. The primary issue raised was whether this activity constituted job work as defined under Section 2(68) of the CGST Act, 2017. The Authority for Advance Ruling examined the definition of job work, emphasizing that it involves any treatment or process on goods belonging to another registered person. Considering LNG as goods classified under HSN 2711, the Authority concluded that the re-gasification of LNG by Shell Energy for its customers fell within the ambit of job work.

Moreover, the Authority referenced Government Circular 126/45/2019-GST dated 22-11-19 to support its decision, clarifying the classification and tax liability of such services. Based on the findings and analysis, the Authority issued a ruling stating that Shell's activity of re-gasification of LNG owned by its GST registered customers indeed amounted to rendering a service by way of job work. The service was classified under a specific entry of Heading 9988 at Sl. No. 26 of Notification No. 11/2017-CT (rate) dated 28.06.2017, as amended, making it liable for CGST at 6% and SGST at 6%.

The judgment underscored the importance of understanding the definition of job work under the CGST Act and applying relevant notifications and circulars to determine the correct classification and tax implications of services provided. By providing a detailed analysis and referencing legal provisions and circulars, the Authority for Advance Ruling clarified the tax treatment applicable to the re-gasification services offered by Shell Energy India Private Limited to its GST registered customers, ensuring compliance with the GST laws and regulations.

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