HSD issued to Contractor on Job work

[Prem Choudhary]

Dear Expert

please advice tax applicability on following transactions, one of my client are issuing HSD to Contractors in specified Job Work and booked HSD in consumption(Cost) and in Contract has specified factor for calculation standard Consumption .If any excess or short issued of HSD with standard factor of Consumption of HSD ,the amount will be deducted or paid to the Contractor.

We are know that HSD is not cover in GST,

1. please advice applicability of taxes on above transactions

2. Documentation require to issue/received with contractor for deduction or payment of above excess/short issue of HSD.

AI Summary

Consumables treated as supply: consumables supplied for job work and consumed may be includible in transaction value for GST.
Whether HSD issued to a contractor is includible in the transaction value for GST hinges on whether the fuel supplied free to the job-worker constitutes part of the consideration and is consumed in the job-work process; if consumables sent for processing are exhausted and not returned, administrative rulings treat them as supplies liable to GST, whereas contractual segregation and adjustment by debit/credit notes are argued by others to avoid independent tax liability.