TaxTMI 
TaxTMI 
2021 (10) TMI 1160
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....18% GST as earlier? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, made by M/s. S. B. Reshellers Pvt. Ltd., the applicant, are as under:- 2.1 The activity of reshelling of old sugar mill rollers is held as repairing activity by the Hon'ble Supreme Court in the case of Lathia Industrial Supplies Co. Pvt.Ltd., 1993(29) ELT-751 and the Hon'ble Tribunal in the cases of Jagat Machinery Manufacturers P.Ltd., 2013 (32) STR-663 & Zenith Roilers Ltd. V/s. CCE, 2014(33) STR-678 under Central Excise era. 2.2 On the said activity, applicant has paid service tax as repair/maintenance service/Business Auxiliary Service as per the Finance Act, 1994 under Service Tax regime. 2.3 Under GST regime also the....
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....Ex. regime and after introduction of GST also the said new sugar mill rollers are being classified under HSN 8438 and are being cleared on payment of 18% GST. 2.6.3 Since the Hon'ble High Court in the case of Saraswati Industrial Syndicate Ltd. V/s. UOI, 1985(20) ELT-251 as well as the Hon'ble Tribunal in their own cases reported in 2001 (127) ELT-699 & 2001(131) ELT-192 had held that the reshelling of old worned out sugar mill rollers is a repairing activity and cannot be treated as manufacturing of new goods, they were not paying any C.Ex.Duty on the said activity of reshelling of old sugar mill rollers during the C.Ex.regime. However, after levy of service tax on the repairing activity, they have regularly paid appropriate service tax on the aggregate of their labour charges and cost of the material used by them in the course of said activity of reshelling of old sugar milli rollers. 2.6.4. However, the Hon'ble High Court in the case of Saraswati Industrial Syndicate Ltd, (cited supra) at para (8) had opined that, if bare shaft received from the customer is converted into sugar mill roller, the activity might amount to manufacture of new goods and the C.Ex.Duty....
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....t of GST. 2.6.9 From the above it is clear that the said advance ruling is on a totally different issue and has got no bearing on the issue involved in the present application. 2.6.10 The Applicants submit that, as explained in para above the activity of reshelling of old sugar mill rollers is nothing but repairing service and is not treatable as supply of goods, under GST regime they have classified the same under SAC 9987 and are paying 18% GST on the aggregate of their labour charges and cost of the material used by them in the course of said activity of reshelling of old sugar mill rollers. 2.6.11 However, after insertion of clause (id) in Sr.No.26 of Notification No.11/2017 CT(R), dt.28.06.2017 declaring 12% GST for services by way of job work, some of their customers has expressed a view that their activity of reshelling of old sugar mill rollers is treatable as job work service covered under said newly inserted clause (id) of Sr. No.26 of Notification No. 11/2017-CT(R), dt.28.06.2017 and will attract 12% GST since the said customers are following the procedure under Rule 55 read with Rule 45 of CGST Rules, 2017 while sending the old sugar mill rollers to them for re....
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....nce merely for the procedure followed by the customers the classification of the activity cannot be changed. In nutshell, the activity of reshelling of old sugar mill roller will remain correctly classifiable under SAC 9987 which specifically covers maintenance, repair and installation (except construction) services and since the concessional rate of 12% GST under Sr. No.26 of Notification No.11/2017-CT(R) is not applicable to the repairing services classifiable under SAC 9987, they will be bound to pay 18% GST on the said activity. 03. CONTENTION - AS PER THE CONCERNED OFFICER: OFFICER SUBMISSION DATED 12.08.2021:- 3.1 Question: - The activity of reshelling of old sugar mill rollers whether is treated as a job work service under SAC 9988 or is treatable as a repair/maintenance service under SAC 9987? Comments: Maharashtra Authority for Advance Ruling vide their order No. GST-ARA 97/2018-19/B-24, Mumbai dated 02.03.2019, has observed that the activity proposed by the assessee i.e., resheliing of old sugar mill rollers treated as a job work service under SAC 9988 or is treatable as a repair/maintenance service under SAC 9987 is incorrect and the said activity is clear....
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....lhapur Division also appeared. 4.2 The application was admitted and called for final e-hearing on 24.08.2021. The Authorized representatives of the applicant, Shri. V. B. Gaikwad, Advocate was present. The concerned officer Shri. Nilesh Sutar, Superintendent, Div-III, Range-II, Kolhapur was present. The Authorized representatives made oral and written submissions in this matter. 4.3 We heard both the sides. 05. OBSERVATIONS AND FINDINGS: 5.1 We have gone through the facts of the case, written and oral contentions made by both, the applicant and jurisdictional officer at the time of preliminary as well as the final hearings. 5.2 The questions raised by the applicant are as under:- 1. The activity of reshelling of old sugar mill rollers whether is treatable as a job work service under SAC 9988 or is treatable as a repair/maintenance service under SAC 9987? 2. Whether the said activity of reshelling of old sugar mill rollers will attract 12% GST in terms of clause (id) of Sr. No.26 of Notification No.11/2017-CT(R), dt.28.06.2017 or will continue to attract 18% GST as earlier ? 5.3 The applicant has submitted that it manufactures sugar mill rollers a....
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....nstrued accordingly'. Thus Job work is a processing or working upon raw materials or semi-finished goods supplied to the job worker, so as to complete a part or whole of the process resulting in the manufacture or finishing of an article or any operation which is essential for the afore-mentioned process. In other words the sugar mill rollers are not brought into existence by the applicant in the subject case, rather the said rollers are already in existence, have been used to an extent which has resulted in wear and tear. 5.8 Whereas, repairing of the impugned rollers signify working on same goods which are already in existence. The already existing goods (old and worn out rollers) are worked on so that the defects get removed and the same are ready for reuse. There is no new product emerging. The supply of service in the subject case is nothing but repair done on some old and used product to make it reusable. The impugned rollers were already a finished product which have been used for a period of time and suffered damages which are being rectified by the applicant. 5.9 The applicant, during the course of the online hearing has submitted that they receive old, used and ....
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....ld sugar mill rollers is treatable as a job work service under SAC 9988 or is treatable as a repair/maintenance service under SAC 9987? 5.11.2 We find that SAC 9988 covers under its ambit "Manufacturing services on physical inputs owned by others". The term 'manufacture' has been defined under section 2(72) of the GST Act, 2017 to mean "processing of raw material or inputs in any manner that results in emergence of a new product having a distinct name, character and use and the term "manufacturer" shall be construed accordingly" 5.11.3 In the subject case there is no processing of raw material nor is there an emergence of a new product. What comes in is sugar mill roller and what goes out is the same thing. Further, Job work is just a process undertaken by a job worker on goods belonging to a principal and may or may not amount to manufacture. Further, a job worker may or may not use some portion of his material. Job work has been defined under section 2(68) of the CGST Act, 2017 to mean 'any treatment or process undertaken by a person on goods belonging to another registered person and the expression "jobworker" shall be construed accordingly'. 5.11.4 In t....
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.... the commercial world. When it is repaired or reconditioned, no new commercial commodity comes into being. Even after undergoing a degree of processing it still retains its original identity". Thus the said Hon'ble Court has held that the reshelling of old worn out sugar mill rollers is a repairing activity and cannot be treated as manufacturing of new goods 5.11.6 In view of the above discussions, we hold that the subject activity of re shelling old and worn out and unusable sugar mill rollers is an activity of repair and squarely falls under SAC 9987. Since the said activity of reshelling of old sugar mill rollers is neither manufacturing nor job work, it will continue to attract 18% GST and not 12% GST in terms of clause (id) of Sr. No.26 of Notification No.11/2017-CT(R), dt.28.06.2017. 5.12.1 The departmental officer has submitted that the Maharashtra Authority for Advance Ruling vide their order No.GST-ARA 97/2018-19/B-24, Mumbai dated 02.03.2019 have already decided the issue. The departmental officer has also submitted that the activity proposed by the assessee i.e., reshelling of old sugar mill rollers treated as a job work service under SAC 9988 or is treatabl....