2020 (7) TMI 225 - AAR - GST

Court rules activities not subject to GST post-implementation, applicant's questions non-maintainable.

In Re: M/s. Woodcraft India Limited

The court held that all questions raised by the applicant regarding the liability to pay GST on invoices and proposed reimbursements from ONGC were ... Levy of GST - civil and interior work done of M/s Oil & Natural Gas Corporation Ltd. - proposed reimbursement from M/s Oil & Natural Gas Corporation Ltd., toward operational site expenses and claim toward rectification of water damages, pertaining to original civil & interior work contract awarded by M/s. Oil & Natural Gas Corporation Ltd. - rate of GST applicable. Levy of GST - Civil and interior work done of M/s Oil & Natural Gas Corporation Ltd. under provision CGST Act - applicable rate of GST - HELD THAT:- Section 142(10) allows the levy tax on goods or services under GST Act, that are supplied only after appointed day i.e. 01/07/2017: In respect of RA Bill No. 22, (issue in the first two questions raised by the applicant), the applicant has carried out and completed the total work before the appointed day and only billing is done after the appointed day and that too after a two year period. The applicant relies on the provisions of time of supply under Section 13 of GST Act. However, even as per the provisions under Section 13 (2) (b) of GST Act, time of supply will be date of provision of service, if the invoice is not issued within the prescribed period. So this is not the activity being undertaken or proposed to be undertaken after the appointee day - there is no upward revision of any prices, as claimed by applicant. The contention of applicant is therefore not accepted - questions posed by applicant are non-maintainable under the provision or Section 95 of the GST Act. The second question raised by the applicant is to clarify the rate of GST if the ruling on question no. 1 is in the affirmative - Since the question no.1 is out of the purview of this Authority, we do not take up the second question for discussion at all and would not answer the same. Levy of GST - Proposed reimbursement of ₹ 1,92,50,247/- from M/s Oil & Natural Gas Corporation Ltd., toward operational site expenses and claim toward rectification of water damages, pertaining to original civil & interior work contract awarded by M/s. Oil & Natural Gas Corporation Ltd. - Applicable rate of GST - HELD THAT:- Even in the subject case where the invoice is not issued by the applicant, the work was already undertaken and completed well before the GST regime. Hence even in this case the activities undertaken by the applicant, does not pertain to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant as per the provisions of Section 95 of the GST Act. Hence, this authority cannot answer the question. Issues Involved:1. Liability to pay GST on Tax Invoice No. 01 dated 25/06/2018 for civil and interior work done for M/s Oil & Natural Gas Corporation Ltd. (ONGC).2. Applicable rate of tax if the liability to pay GST on the above invoice is affirmed.3. Liability to pay GST on proposed reimbursement of Rs. 1,92,50,247 from ONGC towards operational site expenses and rectification of water damages.4. Applicable rate of tax if the liability to pay GST on the proposed reimbursement is affirmed.Issue-wise Detailed Analysis:Issue 1: Liability to pay GST on Tax Invoice No. 01 dated 25/06/2018 for civil and interior work done for ONGCThe applicant, M/s Woodkraft India Ltd, completed the work under a contract awarded by ONGC before the GST regime, with the work completed by 31/01/2016. The tax invoice (R.A. Bill No. 22) was raised on 25/06/2018, during the GST period, with GST @ 18% levied. The applicant contended that this invoice pertains to an upward revision in price and thus falls under Section 142(2)(a) of the CGST Act, deeming it an outward supply liable to GST.However, the Authority observed that the amount mentioned in RA Bill No. 22 is payable under the original contract value, not an upward revision. The work was completed before the GST regime, and the invoice was raised post-GST implementation. Therefore, the provisions of Section 142(2)(a) of the CGST Act do not apply. The activities undertaken do not pertain to the supply of goods or services being undertaken or proposed to be undertaken post-GST implementation. Thus, the question is non-maintainable under Section 95 of the GST Act.Issue 2: Applicable rate of tax if the liability to pay GST on the above invoice is affirmedGiven that the first question is non-maintainable, the second question regarding the applicable rate of tax is also non-maintainable and not discussed further.Issue 3: Liability to pay GST on proposed reimbursement of Rs. 1,92,50,247 from ONGC towards operational site expenses and rectification of water damagesThe applicant claimed additional expenses due to the extension of the project completion period and rectification of water damages, which were disputed by ONGC. An Outside Expert Committee (O.E.C.) recommended reimbursement of Rs. 1,92,50,247. The applicant contended that this reimbursement is an upward revision in price under Section 142(2)(a) of the CGST Act, making it liable to GST.The Authority found that the additional claim pertains to services rendered during the service tax regime, not an increase in the original contract value. The reimbursement is for services completed before the GST regime, and thus, the activities do not pertain to the supply of goods or services being undertaken or proposed to be undertaken post-GST implementation. Therefore, the question is non-maintainable under Section 95 of the GST Act.Issue 4: Applicable rate of tax if the liability to pay GST on the proposed reimbursement is affirmedAs the third question is non-maintainable, the fourth question regarding the applicable rate of tax is also non-maintainable and not discussed further.Order:All questions raised by the applicant are non-maintainable in view of the discussions made above and hence, are not answered.