2026-VIL-77-AAR
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SGST Advance Ruling Authority

GST – Odisha AAR - Scope of “manufacture" under Section 2(72) of the CGST Act, 2017 - Transforming of raw limestone/dolomite extracted from its mine into finished, marketable products through a series of processing steps: crushing, sizing, screening, and grading – Whether the activity of crushing, screening and sizing of limestone/dolomite amounts to "manufacture" under Section 2(72) of the CGST Act, 2017 – HELD - For an activity to qualify as "manufacture" under Section 2(72), all three tests i.e. distinct name, distinct character, and distinct use, must be satisfied cumulatively. In the present case, the raw material as well as the processed output is limestone/dolomite. The chemical composition, mineral identity and commercial understanding of the product remain unchanged - The processes undertaken, namely crushing, screening and sizing, only alter the physical dimensions of the mineral to make it suitable for transportation or specific industrial usage. Such processes do not result in the emergence of a new product having a distinct name, character or use - In the present case, there is no transformation into a new article, only physical dimensions are altered, while the chemical composition, mineral identity and commercial nomenclature remain unchanged – Further, the applicant contention regarding the contractor bearing the commercial/operational risk is irrelevant for GST classification purposes, as the CGST Act does not recognize allocation of commercial risk as a criterion for determining manufacture or supply of goods. The activity falls squarely under Section 7 of the CGST Act read with Sl. No. 03 to Schedule-II, which prescribes that any treatment or process which is applied to another person's goods is a supply of service - The activity carried out by the contractor does not amount to "manufacture" under Section 2(72) of the CGST Act, 2017 – Ordered accordingly
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