Page 144 - GSTL_23rd April 2020_Vol 35_Part 4

470 GST LAW TIMES [ Vol. 35
been observed that steam coal has always been assigned to JSW Energy Ltd. and
not Coking or PC Coal. M/s. JSL have not clarified whether they are having ‘in-
house coal fired power plant’ for production of electricity for captive consump-
tion. The raw material of Job Worker M/s. JEL, is Steam Coal whereas the inputs
for Principal, i.e., M/s. JSW Steel Limited (JSL) for their final product, i.e., Steel is
Coking coal and not Steam Coal, consequentially Steam Coal cannot be consid-
ered as INPUT FOR THE PRINCIPAL. From the documents (a) to (e) mentioned
above, it can be observed that different types of coal are imported. The Coal im-
ported by M/s. JSL is ‘coking coal’ and has different usages compared to ‘steam
coal’, being used by power plant M/s. JEL for generation of electricity, which is
much cheaper (Coking coal is 25,838/MT whereas, steam coal is 5,340/MT) as
can be observed from the documents above compared to the ‘Coking Coal’. This
shows that the inputs being utilized by M/s. JSL for the manufacture of their fi-
nal product i.e. Steel are not the same which they intend to send to M/s. JEL for
undertaking process. Rather, they are proposing to procure the ‘steam coal’
which are inputs for the power plant of M/s. JEL, and intend to avail the credit
of duty on the same which is otherwise not available to M/s. JEL as their final
product, i.e. electricity, is exempted from GST under the GST law.
44. Further as per the procedure of the Job work under CGST Act, 2017,
goods belonging to another registered person are subjected to some treatment or
process and are required to be sent back to the ‘Principal’ within a specified time
after the completion of the Job work or otherwise. Whereas in the instant case,
the steam coal proposed to be supplied by the ‘Principal’ will be used by the job
worker for the generation of electricity and the ultimate goods i.e. electricity will
be supplied back to the ‘Principal’ and not the inputs which have been treated
upon or processed upon by the Job worker. In other words, the ‘Job worker’ is
receiving tangible goods in the form of coal and supplying ‘intangible’ goods in
the form of electricity. Thus, the inputs which are proposed to be sent to JEL by
JSL are being received in completely different form and character, i.e. the identity
of coal i.e. the input has been completely lost. Coal would stand consumed in the
process and would be irretrievable in the same form after the conclusion of job
work, the condition under Section 143 of the CGST Act of bringing back the same
inputs by the Principal would not stand fulfilled.
45. Steam Coal is not input for M/s. JSL, but it is input for M/s. JEL
which generates the electricity using the said Steam coal as fuel for running the
turbine, which in turn generates the electricity. ‘Steam Coal’ is not the input for
M/s. JSL therefore; the goods sent to the job worker should be the Inputs of the
Principal. Here, M/s. JSL are acting as the Principal, so the Inputs should belong
to them. However, in the present case, the goods being proposed to be sent to
M/s JEL, i.e. coal, are the Inputs for M/s JEL itself for their final product i.e. Elec-
tricity and not the Inputs for the Principal, i.e. M/s JSL as they are manufacturer
of Steel and not power.
Hence Steam Coal does not constitute as an input for the Principal (i.e.
JSL) in the process of generation of power.
46. Section 2(68) defines job work as :-
“job work” means any treatment or process undertaken by a person on
goods belonging to another registered person and the expression “job
worker” shall be construed accordingly;
Section 143 defines Job work procedure as :

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