PWD Contractor Liable for 12% GST on Payments Received

The applicant, a PWD Contractor, was ruled liable to collect and pay GST at a rate of 12% on amounts received from the PWD Department and the Executive Engineer. The turnovers were deemed under the GST Act, not the KVAT Act, due to post-GST implementation revisions. The applicant can utilize TDS deducted by the PWD Department to discharge tax liability. Time of supply is determined by invoice issuance or payment receipt. The ruling mandates GST collection and payment on revised estimate amounts and additional supplies from the Executive Engineer.

---

---

Issues Involved:
1. Liability to collect and pay GST on the amount received from the PWD Department as per revised estimates for work executed prior to 01.07.2017.
2. Liability to collect and pay GST on the amount received from the Executive Engineer, Public Works, Inland Water Transport Department, Mangalore Division.
3. Determination of whether the PWD Department is liable to pay GST under the GST Act or VAT under the Karnataka Value Added Tax Act.

Detailed Analysis:

1. Liability to Collect and Pay GST on Amount Received from PWD Department as per Revised Estimates:
The applicant, a PWD Contractor, completed the construction of a bridge and approach road before the implementation of GST on 01.07.2017. The revised estimate for the project was approved post-GST implementation, and supplementary agreements were executed accordingly. The applicant received payments of Rs. 5,56,285 and Rs. 1,48,26,658, with TDS deducted at 1% under CGST and 1% under SGST.

Section 142(2)(a) of the CGST Act mandates that any upward price revision post-GST implementation for contracts entered into prior to the appointed day should be treated as an outward supply under the GST Act. Thus, the turnovers in question are deemed to be under the GST Act, not the KVAT Act. Consequently, the applicant is liable to charge GST on these amounts at the rate of 12% (6% CGST and 6% SGST).

2. Liability to Collect and Pay GST on Amount Received from Executive Engineer, Public Works, Inland Water Transport Department, Mangalore Division:
The applicant raised a tax invoice dated 01.04.2018 for Rs. 5,56,285 with applicable CGST and SGST. The Authority ruled that if these payments are for additional supplies made under different agreements but related to the same contract, they would be liable to GST. The applicant must collect and remit GST on these amounts, utilizing the TDS deducted by the PWD Department to discharge the tax liability.

3. Determination of PWD Department's Liability to Pay GST or VAT:
The Authority clarified that the applicant must issue a tax invoice within 30 days from the date of price revision as per Section 142(2)(a) of the CGST Act. If the invoice is issued within this period, the time of supply is the invoice date; otherwise, it is the date of price revision. If payment is received earlier, the time of supply is the payment receipt date per Section 13 of the CGST Act.

Conclusion:
The applicant is liable to collect and pay GST at the rate of 12% on amounts received from the PWD Department and the Executive Engineer, Public Works, Inland Water Transport Department, Mangalore Division. The turnovers are deemed to be under the GST Act, and the applicant can utilize the TDS deducted by the PWD Department to discharge the tax liability. The time of supply is determined based on the issuance of the tax invoice or the receipt of payment, as stipulated under the CGST Act.

Ruling:
1. The applicant must collect and pay GST at 12% on the revised estimate amount received from the PWD Department.
2. The applicant is liable to collect and pay GST on the amount received from the Executive Engineer, Public Works, Inland Water Transport Department, Mangalore Division.

---