TaxTMI 
TaxTMI 
2019 (8) TMI 1153
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....ce Ruling, constituted under Section 99 of the West Bengal Goods and Services Act, 2017, within a period of thirty days from the date of communication of this Ruling, or within such further time as mentioned in the proviso to Section 100 (2) of the GST Act. Every such appeal shall be filed in accordance with Section 100 (3) of the GST Act and the Rules prescribed thereunder, and the Regulations prescribed by the West Bengal Authority for Advance Ruling Regulations, 2018. 1. Admissibility of the Application 1.1 The Applicant has entered into a contract (hereinafter the Contract) with M/S Kolkata Metro Rail Corporation (hereinafter KMRCL) for 'design, supply, installation, testing and commissioning' of the power supply and distribution sys....
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....lue of supply, as referred to above. 1.4 The questions raised by the Applicant are, therefore, admissible under section 97(2)(c) of the GST Act. The Applicant also declares that the issues raised in the application are not pending nor decided in any proceedings under any provisions of the GST Act. The officer concerned from the Revenue has not objected to the admission of the Application. 1.5 The Application is, therefore, admitted. 2. Submissions of the Applicant 2.1 In its written submission attached to the Application, the Applicant argues that the lump-sum mobilisation advance is provided at the rate of 10% of the contract value. The Contract stipulates that recovery of the advance shall commence when 20% of the original contract va....
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....e liability to pay VAT under the previous tax regime arises on transfer of the property in goods. It is not payable at the time of receipt of the lump-sum amount. On the other hand, liability to pay service tax, as laid down under the Point of Taxation Rules, 201 1, arises upon receipt of payment towards the provision of services or actual provisioning of service whichever is earlier. As such, provisioning of service under the Contract, as stated above, was exempt from service tax. 2.5 The Applicant argues that the lump-sum amount received is in the nature of earnest money deposit and not a payment towards the supply of any specific goods and services. No tax, therefore, is payable at the time of receipt of the lump-sum amount. In support ....
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....the period prescribed under section 31, or the date of receipt of payment, whichever is earlier; or. 3.2 It is, therefore, evident that the date of receipt of payment shall be the time of supply if it precedes the date of issuance of the invoice and the date of provision of service. If the supplier receives any advance payment as consideration, the supply shall be deemed to have been made to the extent covered by the payment [Explanation (i) to section 13(2)]. The Applicant is, therefore, deemed to have supplied works contract service to KMRCL on 01/07/2019 to the extent covered by the lump-sum that stood credited to its account on 01/07/2019 as advance, provided no tax was levied thereon under the VAT or Service Tax Laws in the pre-GST re....
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....the pre-GST period that some amount of the mobilisation advance was adjusted towards payment of the RA bills raised on the milestones reached. The relevant tax invoices clearly show that the Applicant treated the entire amount as the sale of goods in the course of import in terms of section 5(2) of the Central Sales Tax Act, 1956. As no tax is leviable on the advance payment under either the West Bengal Value Added Tax Act, 2003 or the Central Sales Tax Act, 1956, the unadjusted portion of the advance as on 01/07/2019 has not suffered tax under the pre-GST regime under either of the above Acts. 3.6 The Finance Act, 1994 allowed the contractor to pay service tax on that portion of the works contract, which was attributable to the actual pro....
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....ove, 'consideration' includes any payment for the inducement of a supply. Mobilisation advance is meant specifically for inducing the contractor to spend for provisioning the works contract service. The contract provides a mechanism in the form of a bank guarantee that ensures that the advance is not diverted or misappropriated. Its application as payment for inducing the supply is, therefore, direct and unambiguous. It is, therefore, 'consideration,' whether or not in the form of a deposit, for the supply of the works contract service. The Contract makes it amply clear that the entire amount is applied as consideration for provisioning works contract service. 3.9 The Applicant's reference to the decisions of the Tribunal in Thermax Instru....