Page 130 - GSTL_23rd April 2020_Vol 35_Part 4

456 GST LAW TIMES [ Vol. 35
2020 (35) G.S.T.L. 456 (App. A.A.R. - GST - Mah.)

BEFORE THE APPELLATE AUTHORITY FOR ADVANCE RULING
UNDER GST, MAHARASHTRA
Smt. Sungita Sharma and Shri Rajiv Jalota, Members
IN RE : JSW ENERGY LIMITED

Order No. MAH/AAAR/SS-RJ/01A/2019-20, dated 13-1-2020 in Appeal
No. MAH/AAAR/01/2018-19
1
Job work - Generation of electricity - Whether prime raw material of
job worker i.e., steam coal, not inputs for principal for its final product, i.e.,
steel - Coal proposed to be sent by principal to job work to be supplied back in
form of electricity, which in turn are used by principal to manufacture its final
products i.e. steel - Generation of power is one of business activities of princi-
pal in terms of its memorandum of association and coal used for such business
activities would be qualified as input for principal - Electricity can be generat-
ed on job work basis - Coal, despite being consumed in process of the genera-
tion of electricity, thereby becoming irretrievable, will not preclude proposed
arrangement from being job work transaction - Certificate of Cost Accountant
testifying that coal and other inputs constitutes a major cost i.e. more than
95% of the total cost of materials that are required for generation of power,
whereas cost towards water and air would not exceed 0.5% of cost of inputs -
Additions of minor materials by job worker (such as air and water) not to alter
nature and character of underlying transaction - Such would still be consid-
ered as a job work transaction - Contention that no bar on the involvement of
third person in the transportation of inputs from principal to job worker and
vice versa, sustainable - Presence of, and dependency on third party regulator
i.e. MSEDCL during transmission of electricity generated in proposed job
worker’s premises would not detract proposed arrangement from being job
work - Proposed arrangement of supply of coal or any other inputs by princi-
pal to job worker for generation of electricity to be construed as job work - No
GST will be leviable on this supply - Job work charges payable to job worker
by principal to be subjected to GST in terms of the provisions laid out in Noti-
fication No. 11/2017-C.T. (Rate) as amended - Observations of Appellate Au-
thority For Advance Ruling in 2018 (14) G.S.T.L. 571 (App. A.A.R. - GST) re-
pelled and revised - Decision of Authority for Advance Ruling in 2018 (13)
G.S.T.L. 92 (A.A.R. - GST) reversed - Sections 2(48) and 143 of Central Goods
and Services Tax Act, 2017. [2009 (240) E.L.T. 641 (S.C.), 2010 (260) E.L.T. 382
(Bom.), 1994 (73) E.L.T. 497 (S.C.) relied on]. [paras 62, 65, 66, 67, 68, 70, 72]
Appeal allowed
CASES CITED
Appellate Collector v. Wadpack Pvt. Ltd. — 1997 (89) E.L.T. 24 (S.C.) — Referred ...................... [Para 64]
Bharat Commerce and Industries Ltd. v. Collector — 1997 (94) E.L.T. A136 — Referred ............ [Para 64]
Commissioner v. Endurance Technology Pvt. Ltd.
— 2017 (52) S.T.R. 361 (Bom.) — Relied on .............................................................[Paras 20, 21, 52, 69]
Commissioner v. Grasim Industries Ltd. — 2002 (147) E.L.T. 190 (Tribunal) — Referred ........... [Para 37]

________________________________________________________________________
1 On reconsideration of Appellate Order dated 2-7-2018 as per direction of Bombay High Court -
reported in 2019 (27) G.S.T.L. 198 (Bom.).
GST LAW TIMES  23rd April 2020  250