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Maharastra AAR says Conversion of Waste Sand to usable sand is manufacture and not a Job Work

October 13, 2020

The Authority of Advance Ruling (AAR) of Maharashtra has given the ruling that the conversion of waste sand to usable reclaimed sand would get regarded as manufacturing and will be distinct from job work.

Kolhapur Foundry And Engineering Cluster is the applicant in this case who is currently involved in the promotion of commercial activities relating to Foundry Industry and preservation of the environment through its Sand Reclamation Plants.

The Applicant processes the used or waste sand of the Foundry Industry which 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 and water pollution, with heat treatment and variob the waste with small sets of procedures which makes the sand re-usable.

Kolhapur Foundry And Engineering Cluster came to the Authority of Advance Ruling to get an advance ruling on the issues whether the activities taken by its ownself is Supply of Goods or Supply of Job Work Services.

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

A.A. Chahure headed the two-member bench of AAR and gave the ruling that the services provided by the applicant are a Supply of Goods and not the Supply of Job Work Services.

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

The Maharastra AAR explained its judgement as to the conversion of waste sand sent by the principal to job worker by the latter to get sand which is usable in foundries would be a process which has to get regarded as manufacture. 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 the market price for fresh sand.