AI Drafter 
TaxTMI 
TaxTMI 
2020 (7) TMI 225
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....cable thereon. 3. Whether in the facts and circumstances of case, applicant is liable to pay GST on proposed reimbursement of Rs. 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. 4. If the ruling on above question is affirmative, kindly clarify rate of tax applicable thereon. At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to "GST Act" would means CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions made by the applicant is as under:- 2.1 M/s. Woodcraft India Ltd (Applicant) is engaged in undertaking and execution of interior works and other works. M/s Oil & Natural Ga....
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....and bank guarantee due to delay in project on the part of ONGC and hiring of scaffolding. Details of which are as under. a) Insurance Policy extension Rs. 33,27,925/- b) Bank Guarantee extension Rs. 18,36,535/- c) Hiring of Scaffolding Rs: 13,55,100/- Total Rs. 65,19,5601- 2.7 Applicant made claim of Rs. 1,40,28,820/- toward certain damages which took place on account of rain water seepage foil which contractor was not responsible. O.E.C. agreed to the claim and recommended to reimburse an amount of Rs. 1,27,30,687/- to an applicant. 2.8.a) Applicant issued final R.A. Bill. No 22 / Tax Invoice No 001 dated 25/06/2018 for civil & interior work to ONGC, Bandra - Kurla Complex, Mumbai 400 051. Details of which are as under. Value Rs. 2,42,09,594/- CGST 9% Rs. 21,78,863/- MGST 9% Rs. 21,78,863/- Total Rs. 2,85,67,321/ - 2.8 (b) Final summary of above bill as certified by M/s. Oil & Natural Gas Corporation Ltd. Supply amount Rs. 2,43,83,448/- Installation amount Rs. 37,26,285/- Service Tax Rs. 4,57,588/- Total Rs. 2,85,67,321/- 2.8 (c) Calculation of GST to be recovered from ONGC is as ....
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....ard revision in price and therefore in view of Section 142 (2) (a) of CGST Act, it is outward supply under GST law and liable to tax under CGST & MGST Act. Section 142(2) (a) of CGST Act provide that in respect of on-going contract, if there is upward revision in supply of goods or services, then such registered person should issue supplementary invoice or debit note and it should be deemed as outward supply under GST law. 2.12 Applicant has treated impugned contract as works contract under MVAT Act and paid taxes accordingly at composition rate under Section 42(3) of MVAT Act. Under GST law works contract supply is deemed as supply of services in view of Schedule II (6(a)) of CGST Act and therefore provision Section 13 of CGST Act, regarding time of supply would be applicable. "Section 13 of CGST Act: Time of supply of services: (1) The liability to pay tax on services shall arise at the time of supply; as determined in accordance with the provision of this section. (2) The time of supply of service shall be the earliest of the following dates namely: (a) the date of issue of invoice by, the supplier, if the invoice is issued within the perio....
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....ecommended and directed ONGC to reimburse Rs. 1,92,50,247/ -, but till date applicant has neither raised Tax Invoice for Rs. 1,92,50,247/- on ONGC nor received the said mount. As per the recommendation of O.E.C, contract value would automatically get enhanced to the extent of Rs. 1,92,50,247/- which can be said to be upward revision in price i.e. contract value. Therefore, provision of Section 142 (2)(a) would be applicable which deals with revision in price pertaining to ongoing contract. Section 142(2) (a) provides that, where in pursuance of ongoing contract, price of goods of services is increased after appointed day, then it shall be treated as outward supply by registered person under CGST Act and such person ski! issue supplementary invoice or debit note within thirty days from date of such price revision. In present case, as a result of O.E.C. report. dated 21/05/2019, there would be upward price revision in the ongoing contract and outward supply to the extent of such enhanced price and therefore, it should liable to tax under GST Act. Th applicant has not yet issued supplementary invoice or debit note, however considering mandatory time limit for issued of such invoice, w....
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.... to an applicant on matters or questions specified in subsection 2 of Section 97, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. 5.2 Before we decide the questions raised by the applicant in this application, it is essential that it be first determined whether or not the activities undertaken by the applicant pertains to the supply of goods or services or both being undertaker 'or proposed to be undertaken by the applicant. 5.3 From the perusal of activity undertaken by applicant as discussed earlier in this order in detail, it is observed that M/s Woodkraft India Ltd was holding registration under MVAT Act and Service Tax Law in pre-GST period and is also currently registered under GST Act. The applicant had undertaken the work of civil and interior in respect of M/s. Oil & Natural Gas Corporation Ltd. Issued to them vide order No. MR/PO/4BP/BK/52 2013 dated 01/10/2013. This work was completed upto 31/01/2016 i.e. during pre-GST period. The tax invoice (R.A. Bill No. 22) in respect of this completed work was raised by applicant on 25.06.2018 i.e. during GST period along with levy of GST @ 18% whereas as ....
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.... to have been issued in respect of an outward supply made under this Act; "Section 142(10) - Save as otherwise provided in this Chapter, the goods or services or both supplied on or after the appointed day in pursuance of a contract entered into prior to the appointed day shall be liable to tax under the provisions of this Act." "Section 142 (11) (a) notwithstanding anything contained in section 12, no tax shall be payable on goods under this Act to the extent the tax was leviable on the said goods under the Value Added Tax Act of the State; Section 142(11) (b) notwithstanding anything contained in section 13, no tax shall be payable on services under this Act to the extent the tax was leviable on the said services under Chapter V of the Finance Act, 1994;" 5.5 We observe 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 app....
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....s has led to the additional claim of operational site expenses and claim toward rectification of water damages. The applicant and the ONGC had a dispute on this additional claim and therefore, an Outside Expert Committee was appointed. This committee had gone into details of the facts and approved the additional claim of applicant to the extent of Rs. 1,92,50,247/. This claim is over and above the cost agreed in the contract for the sanctioned work. 5.6.2 In this situation also, Applicant has contended that, the said invoice is pertaining to upward revision in price and therefore in view of Section 142(2) (a) of CGST Act, it is outward supply under GST law and liable to tax under CGST & MGST Act. 5.6.3 The documents submitted by the applicant as well as the oral submissions made, do not show that the said invoice has been raised in pursuance of increase in contract value. Further, from the submissions made by the applicant we find that in respect of additional claim of Rs. 1,92,50,247/-, the services of site expenses & rectification of water damages was undertaken by the applicant and completed during the service tax regime. These services of site expenses & rectification of ....