2021 (3) TMI 802

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.... unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act, 2017 would also mean a reference to the same provisions under the UPGST Act, 2017. Brief Facts of the Case 1) M/s. Uttar Pradesh Avas Evam Vikas Parishad, Global Construction and Consultancy Cell, Neelgiri Complex, Indira Nagar, Lucknow (here in after called the appellant) is a registered assessee under GST having GSTN: 09AAAJU0103AFZF. 2). The appellant is a Board constituted under Uttar Pradesh Avas Evam Vikas Parishad Adhiniyam, 1965 and entrusted with the work to execute housing and improvement schemes in the State, whether chalked out by itself or by any local authority. Further, as per Section 46 of the Uttar Pradesh Avas Evam Vikas Parishad Adhiniyam, 1965, the applicant may also undertake the execution of any housing or other building project at the request of the State Government on such terms and conditions as may be agreed upon. This work is popularly known as "Deposit Work". 3). The appellant receives funds, in advance, for said "Deposit Work", with certain prefixed conditions such as: i. All the money should be used for execution of particular project....

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.... be spent only as per conditions impose on it. 7.3) The Authority has erred in describing the term "Deposit", mentioned in proviso to sub section 31 of the Section 2 of the CGST Act, 2017, as "Security Deposit". As per appellant, the term "deposit", mentioned in the said Section, refers to an amount given to the supplier which can be adjusted against the consideration receivable later on. 7.4) Accordingly the Authority has erred by holding the date of receipt of funds as the "time of supply" and the total amount of funds received as "value of supply". 8). The appellant was granted personal hearing on 11^th March 2020 and 10^th June 2020. Sh. M. K. Singh, Consultant and Sh. A. K. Sinha, Consultant/ Authorized representatives appeared for hearing on behalf of appellant on 10^th June 2020. During the personal hearing they submitted additional written submission and also reiterated their submission already made vide their application dated 24.01.2020. Gist of the additional submission filed by the appellant is as under: 8.1). The funds required for execution of such projects are provided entirely by Government, generally in lump sum before the start of the work, with condit....

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.... at the time of personal hearing) as :- "15. Deposit Works- This term is applied to works of construction or repair the cost of which is met not out of government funds but out of funds from non-government sources, which may either be deposited in cash or otherwise placed at the disposal of divisional officer. Works executed for municipalities and other public bodies fall under this category when the cost is chargeable either to cash deposits made for the purpose or to their credit balances at treasuries." 11). We observe that apart from entrusted work of executing housing and improvement schemes in the State, the applicant may also undertake the execution of any housing or other building project at the request of the State Government or, with the previous approval of the State Government, at the request of any other person on such terms and conditions as may be agreed upon. This work is known as "Deposit Work". As per the appellant the funds required for execution of such projects are provided entirely by the Government, generally in lump sum before the start of the work string with certain restrictions viz. the funds cannot be diverted to any other project and any int....

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....vided from non-governmental sources. Further the advance amount is also routed through Government i.e. amount received by the appellant is provided by the service recipient agency but through Government. However as per the interest payment challans provided by the appellant the interest amount is being credited to the Government account and not in the account of the service recipient agency. 15). Further we also observe that as per general accounting standard the "Advances" are reflected as "liability" in the balance sheet of the recipient and as and when the portion of work get completed / invoice is issued, that amount of advance get transferred from liability head to the income head of the recipient. This fact is also confirmed by the appellant in their additional submission that the "Deposit Work" .amount is reflected as liability in their balance sheet. Accordingly we are in unison with the Authority for Advance Ruling that the said "Deposit Work" amount received by the appellant is an "Advance Payment" and not "Deposit". 16). As regard to the appellant's contention regarding proviso of Sub Section (31) of Section 2 of the CGST Act, we observe that the proviso itself....

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....view of above, we observe that in term of above Sub Section 2 (a) and 2 (b), the time of supply of services shall be the earliest of the following:- i. the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed, or ii. the date of provision of service, if the invoice is not issued within the period prescribed, or iii. the date of receipt of payment. Accordingly, in our opinion, the law is crystal clear in this regard that once any advance amount is received towards provision of any service that will be treated as the time of supply. We, therefore, opined that the Authority has rightly ruled that the time of receiving of advance payment will be time of supply with reference to discharge of GST liability. 18). Now coming to the value of taxable supply in case of advance payment, we observe that explanation given in the sub Section 2 of Section 13 of the CGST Act, 2017 provides that-: "Explanation- For the purpose of clause (a) and (b)- (i) the supply shall be deemed to have been made to the extent it is covered by the invoice or, as the case may be, the payment." We also observe that the is....