Clarification on GST Applicability for Petroleum Gases Retained in the Manufacture of Petrochemical and Chemical Products: Circular No. 53/27/2018-GST
<p><span>The Ministry of Finance issued Circular No. 53/27/2018-GST on 9th August 2018, providing clarification on the applicability of GST on petroleum gases retained for the manufacture of petrochemical and chemical products. Here's a summary of the key highlights:</span></p><p><span><strong>1. Background and Previous Clarifications:</strong></span></p><ul><li><span>References regarding GST applicability on petroleum gases retained for manufacturing were addressed in Circular No. 12/12/2017-GST and Circular No. 29/3/2018-GST.</span></li><li><span>The issue concerned whether GST should be levied on the whole quantity of raw materials supplied by oil refineries or only on the net quantity retained by manufacturers.</span></li></ul><p><span><strong>2. GST Council Recommendation:</strong></span></p><ul><li><span>In its 28th meeting on 21st July 2018, the GST Council recommended a general clarification for the petroleum sector.</span></li><li><span>It was decided that GST would be payable by the refinery on the value of the net quantity of petroleum gases retained for manufacturing petrochemical and chemical products.</span></li></ul><p><span><strong>3. Clarification on GST Levy:</strong></span></p><ul><li><span>GST will be payable by the refinery only on the net quantity of petroleum gases retained by the recipient manufacturer.</span></li><li><span>The refinery is liable to pay GST on the returned quantity of petroleum gases when supplied to any other person.</span></li></ul><p><span><strong>4. Applicability to Similar Cases:</strong></span></p><ul><li><span>This clarification applies mutatis mutandis to other cases involving the supply of goods where feedstock is retained by the recipient and the remaining residual material is returned to the supplier.</span></li><li><span>Net billing is done on the amount retained by the recipient.</span></li></ul><p><span><strong>5. Context and Legal Compliance:</strong></span></p><ul><li><span>This clarification is issued in the context of GST law only, and any past issues will be dealt with according to the law prevailing at that time.</span></li></ul><p><a href="https://cms.plasament.com/storage/circular-no53.pdf">circular_no.53</a><br> </p><div> </div>