No GST payable on washed/rejected coal from washery on which Compensation Cess is paid and ITC is not availed

Last updated: 12 January 2023

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The Chhattisgarh Authority for Advance Ruling has determined that no GST Compensation Cess is payable on coal rejects supplied by a coal washery. This ruling applies provided that the Compensation Cess was paid on the original raw coal and no Input Tax Credit (ITC) has been claimed for this cess. The decision clarifies that rejects arising from coal on which the full cess has been discharged are eligible for a nil rate.

Court :
AAR, Chhattisgarh

Brief :
The AAR, Chhattisgarh in the matter of M/s Parsakente Collieries Limited [Advance Ruling No. STC/AAR/08/2021 dated December 17, 2021] has ruled that nil rate of Compensation Cess is applicable on supply of coal rejects by the coal washery, as long as it arise from the raw coal on which appropriate Compensation Cess has been paid during the supply and where no Input Tax Credit ("ITC") of the Compensation Cess so paid is availed, in terms of Sl. 41A of Notification No. 1/2017- Compensation Cess dated June 28, 2017 ("the Compensation Cess Rate Notification")

Citation :
Advance Ruling No. STC/AAR/08/2021 dated December 17, 2021

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