9911796707
TMI Blog2023 (1) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... e ruling have changed. 4. Advance Ruling obtained by the applicant by fraud or suppression of material facts or misrepresentation of facts, shall render such ruling to be void ab-initio in accordance with Section 104 of the Act. 5. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act. 1. M/s. Zuha Leather Private Limited, No. 22, V.V. Koil Street, Periamet, Chennai 600 003. (hereinafter called as the 'Applicant') is registered under GST Acts with GSTIN 33AAACZ2099M1ZW. The Applicant has filed an application in Form GST ARA - 01 under section 97 of the Central Goods and services Tax and the Tamilnadu Goods and Services Tax Act, 2017, seeking advance ruling on the following question; Whether the activity of tanning, with chemical consumption, carried out by the applicant is coming within the purview ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods of registered and unregistered persons. 3.1 Therefore, though the Applicant is clear that the activity falls under job work service, ambiguity arises due to transfer chemicals in the contract of tanning, which has significant value (being 60% to 70%) in the contract price and further with higher rate of tariff under GST. Hence, Applicant requires clarification whether the activity of the Applicant falls within the definition of Job work under section 2(68) of CGST Act. 3.2 The Applicant had furnished the following rulings in their support: * In the case of M/s. CCE, MUMBAI-V_v. SHAKTI INSULATED WIRES LTD. [2010] 1 taxmann.com 883 (Mumbai - CESTAT) it was held that it was job work even if job worker puts own inputs and later recovered the cost of inputs from principal manufacturer. * In the case of M/s Madura Coats Ltd. v. Collector of Central Excise (1980 E.L.T.582) [Cal HC], it was held that "a work does not cease to be a job work simply because the job worker supplies some additional articles which do not constitute a substantial part of the manufacturing process"; * In the case of Prestige Engineering Vs CCE [1994(73) ELT 497 (SC)] it had been held that addition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pal to the Applicant, the Applicant submitted copies of e-way bill (e-way bill no. 761146585647, 771146583082, 571188324748) showing the transfer of leather from Principal to the Applicant and e-way bill (e-way bill no. 511188533010, 591188947004, 551189201808, 531192199198) showing the clearance of finished leather back to the Principal. 4.3. Flow chart for Processing submitted by the Applicant is shown hereunder: ZUHA LEATHER PVT.LTD., VANIYAMBADI. PROCESS FLOW DIAGRAM FOR GARMENTS LEATHER (COW WET BLUE TO FINISH -JOB WORK) ZLPL/PFD/01/0 Rev:02 01.06.2020 1 WET BLUE LEATHER ARRIVAL ¯ 2 ASSORTMENT ¯ 3 STORAGE JOB WORK ORDER>JOB CARD->ISSUING-->PROCESS ROUTE CARD ¯ 4 SAMMYING ¯ 5 WET SHAVING ¯ 6 TRIMMING ¯ 7 DYEING ¯ 8 SETTING ¯ 9 REVERSIBLE SETTING ¯ 10 VACCUM ¯ 11 HOOKING ¯ 12 MOLISA STACKING ¯ 13 DRY MILLING ¯ 14 BASE COAT-SPARY ¯ 15 COLOR-SPRAY ¯ 16 MOLISA STACKING ¯ 17 MEASURING ¯ 18 PACKING ¯ 19 INVOICE ¯ 20 DISPATCH 5.0 The State jurisdictional authority, the Assistant Commissioner (ST), Vepery Assessment Circle vide their letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be regarded as composite supply. 6.4 As per Section 2(30) of CGST Act, 'Composite Supply' is defined hereunder: The Applicant has further contented that; "Composite Supply" means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. Illustration: Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply;" 6.5 In the instant case, on perusal of the invoices of job work and flowchart of the process submitted by the Applicant, it is clear that hides and skins (Chapter 41) are received from Applicant's customer for the job work of tanning and that certain tanning chemicals are added to assist the tanning process. After various processes, the raw hides and skins (Chapter 41) are converted in to finished leather (Chapter 41) and returned back to the Applicant's customer. The Customer (M/s Century Overseas - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) ............... (b) ............... (c) ............... (da) ............... (e) processing of hides, skins and leather falling under Chapter 41 in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975); (ea) manufacture of leather goods or footwear falling under Chapter 42 or 64 in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) respectively; (f) ............... (g) ............... (h) ............... (i) ............... 2.5 2.5 5 - (ia) to (ic) 6 6 12 (id) Services by way of job work other than (i), (ia), (ib) and (ic) above; (ii) to (iia) (iii) (iv) Manufacturing services on physical inputs (goods) owned by others, other than (i), (ia), (ib), (ic), (id), (ii), (iia) and (iii) above. 9 9 18 - 6.8 Further, CBIC vide Circular NO. 126/45/2019-GST [F. NO. 354/150/2019-TRU], dated 22-11-2019 clarified and distinguished that item (id) and (iv) in the above heading 9988, as it pertains to goods of unregistered persons. The relevant paragraph of the circular is entrusted as below: "4. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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