Page 169 - GSTL_23rd July 2020_Vol 38_Part 4

2020 ] IN RE : ORDNANCE FACTORY, BHANDARA 535
are destroyed is included in the value of the finished goods that are
manufactured & thus, included in the value of taxable goods sup-
plied.
(D) Apart from sale/transfer of manufactured goods, the factory also
sells the scrap generated during the manufacturing process and
other used and waste goods to private entities through auction pro-
cess.
(E) Employees of the factory from all over the country come down and
reside in the factory estate to help run the factory and it is the obli-
gation of the factory to provide them with residential quarters for
accommodation and to maintain and upkeep their residential quar-
ters along with maintenance of estate including playground, com-
munity hall, hospital, roads, school etc. Monthly License fee is col-
lected from the employees in respect of such accommodation.
(F) There are 2 guest houses in the factory estate. Expenditure on
maintenance of guest houses for stay of various persons visiting the
factory is incurred by our organisation. Guest houses are used to
provide accommodation services to various guests including em-
ployees on tour. Room charges are recovered from such guests for
their stay on per day basis that are different for such different guest
houses.
(G) The factory estate is huge and some portion of it has been let out on
leasehold basis for commercial purposes like daily needs shops,
banks, etc. Our organisation collects lease rentals from the tenants
of such let out immovable property.
(H) Other allied establishments like local accounts office & SQAE are al-
so functioning for the factory & within the factory. These organisa-
tions though a separate entity, they are units of the Central Gov-
ernment and function for OFBa. Local accounts office provides ser-
vices related to accounting of transactions of OFBa. Payment of bills
of OFBa etc. to OFBa & SQAE provides service related to quality
control & checking of products of OFBa. The cost of salary & other
expenses related to such allied establishments is included in the to-
tal cost of manufacturing of final products of OFBa & thus, forms
part of the value of taxable supply. Employees of such establish-
ments are also provided residential quarter for accommodation and
monthly license fees is collected from them in respect of such ac-
commodation. The employee strength of such organisations is ex-
tremely small in comparison to the employee strength of OFBa.
(I) The whole of OFBa estate is divided into two parts -
(a) Factory premises. It consists of the factory where manufactur-
ing activity is carried out & the administration building.
(b) Estate area : - It consists of the area other than factory premis-
es. Residential quarters of employees of OFBa and allied es-
tablishments, gardens, parks, playground, factory school for
children of employees, hall for recreational activities, places
of worship of God, market area, guest houses, school for
children of employees, factory hospital & open land is in-
cluded in such estate area.
GST LAW TIMES  23rd July 2020  169