TaxTMI 
TaxTMI 
2018 (11) TMI 59
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....icant manufactures Industrial Gases using various inputs such as natural gas, de-mineralized water, raw water etc supplied by the customer BPCL. Certain quantum of natural gas provided by the customer is supplied to the gas turbines for generation of electricity which is used to power the entire plant. At present BPCL sells all inputs to the applicant collecting Sales Tax/VAT and applicant sells manufactured industrial gases to BPCL charging GST. Natural gas provided by BPCL is the major input which is a commodity outside the levy of GST, whereas the finished product, industrial gas attract GST. Now they desire to change the business model to job work model. Under this model, BPCL would commence movement of inputs to applicants plant throug....
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....vering the job work charges for processing of natural gas and other inputs into industrial gases for BPCL. The job work charges would include the job work fee and conversion guarantee fee. As the inputs are received on free of cost, the job work/processing charges will be significantly lower than the market value of industrial gases provided by the applicant to the principal. The BPCL would be disclosing the inputs including natural gases sent to the applicant in the return ITC-04 which is required to be submitted by the principal supplying goods to the job worker on a quarterly basis. The applicant would be disclosing the value of tax invoices raised in respect of supply of job work services as taxable supplies in GSTR-1 as well as GSTR-3B....
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....r inputs to industrial gas qualify as 'treatment or process' of inputs. Hence the activity squarely fall under the scope of 'job work'. Under GST regime the scope of 'job work' includes manufacture as well, The HSN 9988 pertains to job work, specifically includes the words, manufacturing services on physical inputs owned by others. The term 'manufacture' defined under Section 2(72) of GST Law as processing of raw material or inputs in any manner resulting in emergence of a new product having distinct name, character and use. The inputs received by the applicant send back to the principal as industrial gases, which have a distinct name, character and use as compared to the inputs. In Eaton Fluid Power Ltd case it has specifically observed....
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....k is defined as any treatment or process undertaken by a person on 'goods' belonging to another registered taxable person. As for as a job worker is concerned, statute does not specify any restriction that the 'inputs' subject to the treatment or process shall be taxable goods. Therefore, irrespective of whether the goods received by the applicant are taxable or not, job work activity should be allowed to be carried out on such activity. The principal is a taxable person under GST Law. The ownership of all the inputs as well as the output are vested with the principal. These inputs and out puts are used in the course or furtherance of business of manufacture of petroleum products. Under GST regime 'inputs' have wider meaning, as such the go....