GST: Conversion of Waste Sand to usable sand is ‘Manufacture’ and not ‘Job Work’, says AAR [Read Order]

GST: Conversion of Waste Sand to usable sand is ‘Manufacture’ and not ‘Job Work’, says AAR [Read Order]

Conversion - Waste Sand - manufacture - Job Work - AAR - Taxscan

The Maharashtra Authority of Advance Ruling (AAR) ruled that the conversion of waste sand to usable reclaimed sand can be regarded as manufacture and distinct from job work.

The Applicant, Kolhapur Foundry And Engineering Cluster is involved in promotion of commercial activities relating to Foundry Industry and preservation of environment through its Sand Reclamation Plants.

Used/waste sand of Foundry Industry is neither capable of being reused nor being capable of being dumped anywhere in open, due to environmental reasons like, contamination of ANCE Rte soil/ water pollution.

The Applicant processes such waste sand vide heat treatment & variob her set of small procedures and and is thus reclaimed and made re-usable.

The applicant sought an advance ruling on the issues that whether the activity of Applicant is Supply of Goods or Supply of Job Work Services.

The other issue raised was in respect of the used waste sand which is of the value Nil (Refer separate Valuation Certificate by Engineer) will have any impact on valuation.

The two member bench of A.A. Chahure ruled that the services provided by the applicant is a Supply of Goods and not the Supply of Job Work Services.

The Authority, while addressing the another issue ruled that used waste sand which is of the value Nil (Refer separate Valuation Certificate by Engineer) will have the impact on valuation.

Therefore, the Authority has ruled that conversion of waste sand sent by principal to job worker by the latter to get sand which is usable in foundries would be a process which has to be regarded as manufacture. This cannot be regarded as mere job work. Consequently taxability of the final product as goods would be appropriate. The waste sand received at NIL value from principal can also be said to influence the value of the final product where it was found to be marginally lower than market price for fresh sand.

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