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2020 (3) TMI 295
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....ndanchavadi, Perungudi, Chennai - 600 096. (hereinafter called the 'Applicant' or SPCPL) is registered under the GST Vide GSTIN 33AAACS6994C1ZC. They are primarily engaged in the construction business dealing with various clients under composite Works Contracts involving supply of both materials (goods) and service. They have sought Advance Ruling on the following questions: 1. Whether the Transitional Provisions under Section 142(11)(c), (Chapter XX) of TNGST Act, 2017/CGST Act, 2017 is correctly applicable for the remaining installments of "Mobilization Advance', which transitioned into the GST regime and to be adjusted/deducted by THE APPLICANT post the implementation of GST (i.e. Post July 1, 2017) 2. Whether, THE APPLICANT would be liable to pay GST, under the provisions of the TNGST Act, 2017/CGST Act, 2017 and allied laws, on the installments of the 'Mobilization Advance', which has transitioned into the GST regime and adjusted 'deducted by THE APPLICANT post the implementation of GT (i.e. post July 1, 2017) 3 Whether, THE APPLICANT would be eligible to avail Input tax Credit (ITC) on Service Tax paid which was transferred from Pre-GST period throu....
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....GST regime. During September 2017, this amount has been transferred into GST common portal and credited into the Electronic Credit Register of the applicant. The applicant has made reference to Section 142(11)(c) of CGST Act/TNGST Act 2017 which provides that in cases where both VAT and Service Tax are payable then, tax under this Act (i.e. TNGST Act, 2017/CGST Act, 2017) shall be payable, on the supplies made after July 1, 2017, and the taxpayer would be allowed to avail the credit of VAT or Service Tax paid under the erstwhile taxation laws. The applicant is of the view that the portion of 'Mobilisation advance' transited into GST regime would get covered under Section 142(11)(c) of CGST Act/TNGST Act 2017. The applicant has stated that their client Christian Medical College, Tamil Nadu, India (herein after CMC) has disputed this and they are of the opinion that the portion of the Mobility Advance transited into GST regime would get covered under Section 142(11)(b) of the TNGST Act, 2017/CGST Act, 2017 as Service tax was leviable on 'Mobilization Advance' paid for Works Contract, under Chapter V of the Finance Act, 1994 and no VAT was paid and as such no GST shall be payable on t....
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....nded an opportunity to hear again on 24.07.2019. They appeared and submitted two volumes giving details of the contract, mobilization advances bills, subsequent monthly bills raised. They also submitted copies of the returns filed for Service Tax for the months of January 2017 till the mobilization advance have been recovered. They stated that they have charged Service Tax on the advances and adjusted amounts during Jan- June 2017, while for the monthly billing for VAT they have paid VAT for the which have not been billed separately. They have availed regular scheme of 'deemed sale' value under VAT regime and stated further that they have not paid VAT on the mobilization advances as it is not required. They also submitted that for question (1), the relevant supplies are supplies made for RA bills for the months of July 2017 onwards. For question (2), the supplies are Running Bills from Jan 2017 to June 2017. They stated that they have paid the Service Tax on the mobilization advance in the months of October -December 2017 return and sought to submit Copies of the return with working sheet in a weeks' time. 3.3 Further to the above hearing, the applicant submitted written submiss....
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.....66B read with Sec.67 of the Finance Act, 1994. However, no Value Added Tax was paid on Mobilization Advance as VAT would be payable subsequently only at the time of charging Running Bill (RA Bill). The applicant has sought ruling on the following questions: 1. Whether the Transitional Provisions under Section 142(11)(c), (Chapter XX) of TNGST Act, 2017/CGST Act, 2017 is correctly applicable for the remaining installments of "Mobilization Advance', which transitioned into the GST regime and to be adjusted/deducted by THE APPLICANT post the implementation of GST (i.e. Post July 1, 2017) 2. Whether, THE APPLICANT would be liable to pay GST, under the provisions of the TNGST Act, 2017/CGST Act, 2017 and allied laws, on the installments of the 'Mobilization Advance', which has transitioned into the GST regime and adjusted 'deducted by THE APPLICANT post the implementation of GT (i.e. post July 1, 2017) 3. Whether, THE APPLICANT would be eligible to avail Input tax Credit (ITC) on Service Tax paid which was transferred from Pre-GST period through TRAN-1 Return filed in terms of the section 142(11)(c), under Transitional Provisions (Chapter XX) of both TNGST Ac....
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....27/-(on the 40% of the advance received).They had issued Tax Invoice No. CMC/1349/Mob.Adv.01/16-17/07 dated 13.12.2016 and paid the service tax and cess of Rs. 44,82,227/- on the said amount received under "Works Contract Service' for the month of December 2016 as reflected in the statements furnished by the applicant and the ST-3 Returns for the half-year October 2016-March 2017. The applicant has received the Tranche 2 of the advance of Rs. 7,91,86,000/- in the month of March 2017, which is inclusive of Service tax and cess of Rs. 44,82,227/-(on the 40% of the advance received). They had issued Tax invoice No. CMC/1349/Mob.Adv.02/ 16-17/16 dated 04.03.2017 and has paid the service tax and cess of Rs. 44,82,227/- as reflected in the statements. The applicant has paid the service tax as per the Point of Taxation in respect of services during Pre-GST Regime. The applicant has issued Tax Invoice as per the Service Tax Law mentioning the advance value and service Tax with CESS to their customer. Thus as far as the applicant is concerned, we find that they have received the advance for execution of original works and had paid service tax & cess on the 40% of the total value after claim....
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....s entered in the books of account of the supplier or the date on which the payment is credited to his bank account, whichever is earlier. The applicant has received the advance against the service to be provided and as per the explanation above, the supply is deemed to have been made to the extent it is covered by the invoice or of the payment and the 'date of payment' is the date on which it is entered into the books of account of the supplier, i.e, the applicant. In the case at hand the applicant has raised the invoice to the full Mobilisation Advance received by them and is, therefore, deemed to have supplied works contract service to CMC prior to 1-7-2017 to the extent covered by the Mobilisation advance that stood credited to its account as per Section 13 of the GST Act. 7.3 The first and the second question is as to whether GST is to be paid on the amount raised in the RA Bill periodically post implementation of GST, without deducting the part of mobilisation advance adjusted in the bills raised or the liability to GST is to be arrived at after deducting the part of Mobilisation advance being adjusted in the RA bill. The applicant has stated that their case is covered u....
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.... which both VAT and Service Tax are paid in the Pre-GST regime and on which GST would be leviable to the extent 'supply' is made after the appointed date for the recipient who has actually paid the tax. In the case at hand, the applicant has paid Service Tax on the advance received as per the said statute for which the applicant has raised invoice on their service receiver along with the component of service tax but no VAT has been paid/received from their customer on that part of the Mobilisation Advance pertaining to materials and therefore, this provision do not apply to the case at hand. Accordingly, we hold that the transitional provisions under Section 142(11)(c) is not applicable to the case of the applicant. 7.4 Further 'Supply of Works Contract' is deemed to be a service under GST. Under the pre-GST regime, service tax was leviable on the service portion of the Works Contract, which in the case at hand being original work, was levied on 40% of the value. The applicant on receipt of advance has paid the service tax on the 40% of the value as required under the provisions of Service Tax. The like situations are more aptly covered under the transition provision at Section ....