TaxTMI 
TaxTMI 
2023 (7) TMI 571
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....nt requested an advance ruling on the following: 3.1. Whether Pure Services or composite supply services with a material value less than 25% of the total value provided by the contractors to KSEBL (being a Government Entity) are exempt from GST [Notification No.: 12/2017-Central Tax (Rate) - SI. No 3,3A]? 3.2. If the answer to the above is Yes, whether the taxes already collected by the contractor from KSEBL and remitted to the department can be refunded to KSEBL? 3.3. Whether KSEBL can avail direct input tax credit on Deposit works in the following cases; a) KSEBL is collecting GST on Work Deposits from the consumers and remits the same. The subject work is wholly outsourced by KSEBL to a third-party contractor and GST is paid to the contractor. Whether KSEBL can avail of Input Tax Credit on GST paid to the contractor? b) KSEBL is collecting GST on Work Deposits from the consumers and remits the same, KSEBL purchases the specific material separately and uses it in the work. Only labour is outsourced. GST is paid on material purchased and to the labour contractor. Whether KSEBL can avail of Input Tax Credit on GST paid on materials and on labour contract?....
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.... 4.2, The various clauses under Article 243G/W of the Constitution related to the activities of the applicant are: 1. Clause 5 of Article 243W; Water supply for domestic, industrial, and commercial purposes. 2. Clause 17 of Article 243W: Public amenities including street lighting, parking lots, bus stops and public conveniences. 3. Clause 14 of Article 243G: Rural electrification, including distribution of electricity. 4. Clause 15 of Article 243G: non-conventional energy sources. 4.3. The applicant is receiving many services from contractors/others which are in the nature of pure-services/in the nature of composite service where value of supply of goods constitutes not more than 25% of the value of the said composite supply. At present, many contractors who are registered under GST providing pure services to the applicant in relation to the distribution of electricity are collecting GST from them, even if the services they provide are falling in the above category of services. 4.4 Regarding input tax credit on Deposit Works undertaken by them, they submit that as per Section 16(1) of CGST Act 2017; every registered person shall, subject....
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.... Description Amount Remarks A Total cost of work 15000 Works contract wholly awarded to contractor A (1) GST on the above to be paid to the contractor 2700 B Supervision charges (10% on A + A (1)) 1770 C Miscellaneous 2000 Total 21470 F GST (to be remitted to department (18% on total) 3864 G Total amount 25334 There is cascading effect of tax as represented by the above table due to the non-ailment of Input Tax Credit of A (1) above. 4.8 Regarding the GST liability under reverse charge on the Rent a Cab Services received, the applicant submits that Para (B) 16 of the Press Release dated 20.09.2019 informing the decisions of the 37th GST Council Meeting reads as follows; "To allow RCM to suppliers paying GST at the rate of 5% on renting of vehicles, from a registered person other than a body corporate (LLP, Proprietorship) when services provided to body corporate entities". As per Notification No; 22/2019-Central Tax (Rate) dated 30.09.2019, a Body Corporate is liable to remit GST on Reverse Charge basis for services provided b....
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.... The applicant was granted the opportunity for personal hearing on 20.07.2022 by virtual mode. Shri, E.N. Satheesan, Assistant Finance Officer, Ranjith and Bobby George, Divisional Accounts Officers attended the personal hearing on behalf of the applicant, The officers reiterated the contentions made in the application. 7. Discussion and findings: 7.1 The matter was examined in detail. Kerala State Electricity Board Ltd is established by the Government of Kerala to carry out the business of generation, transmission and distribution of electricity in the State of [Kerala and is a "State Transmission Utility" within the meaning of [Section 2 (67) of the Electricity Act, 2003, It is seen that this authority in Advance Ruling No. KER/64/2019 dated 12.10.2019 in the 'application of M/s R S Development arid Constructions India Private Ltd has already held that Kerala State Electricity Board Ltd is a government entity as defined in Para 2 (zfa) of Notification No. 12/2017 [Central Tax (Rate) dated 28,06.2017. 7.2. The applicant has raised various questions in the application. Before proceeding to answer the questions Raised by the applicant it is necessary to examine the sc....
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....thority under this Chapter shall be binding only,- (a) on the applicant who had sought it in respect of any matter referred to in sub-section (2) of section 97 for advance ruling; (b) on the concerned officer or the jurisdictional officer in respect of the applicant (2) The advance ruling referred to in sub-sec ion (1) shall be binding unless the law, facts or circumstances supporting the original advance ruling have changed. 7.6. On a combined reading of the definition of the terms, advance ruling, applicant and the above provisions governing advance ruling under the CGST Act it is evident that an applicant can make an application for Advance ruling if the following conditions are satisfied; (1) the applicant is either registered under GST law or is desirous of obtaining registration; (2) the matter or question certains to any issue specified in Section 97 (2); (3) such a transaction is being undertaken or proposed to be undertaken by the applicant and the advance ruling is 'binding only on the applicant and the jurisdictional officer of the applicant. 7.7. On perusal of the first and second questions raised by the ap....
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....ng the services to their consumers. The first scenario is where the subject work is wholly outsourced by the applicant to a third-party contractor and GST is paid to the contractor. The second scenario is where the applicant purchases the specific material separately and uses it in the work and labour alone is outsourced and the GST is paid on material purchased and to the labour contractor. The 3rd scenario is where the applicant utilizes the materials from the pool of materials in stock which is centrally procured earlier paying GST and labour alone is outsourced and GST is paid on materials at the time of purchase and to the labour contractor. 7.10. Sections 16 to 18 of the CGST Act, 2017 enumerates the circumstances in which ITC is allowed and the conditions, limitations and the procedures subject to which the ITC can be availed. 7.11. Section 16 of the CGST Act, 2017 which prescribes the eligibility and conditions for availing input tax credit reads as follows; "SECTION 16. Eligibility and conditions for taking input tax credit.- (1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and, in the manner, speci....
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....le on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed: Provided also that the recipient shall be entitled to avail of the credit of input tax on payment made by him of the amount towards the value of supply of goods or services or both along with tax payable thereon. (3) Where the registered person has claimed depreciation on the tax component of the cost of capital goods and plant and machinery under the provisions of the Income-Tax Act, 1961, the input tax credit on the said tax component shall not be allowed. (4) A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the thirtieth day of November following the end of financial year to which such invoice or debit note pertains or furnishing of the relevant annual return, whichever is earlier." ....
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.... read with Rules 42 and 43 of the CGST Rules, 2017. 7.15 In view of the above discussion and conclusion in respect of the 3rd question, the 4th question has lost relevance. 7.16 The 5th question raised by the applicant is regarding the liability of the applicant to pay GST under reverse charge on the rent a cab service received by them. Since the question raised by the applicant is regarding the applicability of Notification No, 13/2017 Central Tax (Rate} dated 28.06,2017 that notifies the categories of supply of services on which the tax is payable on reverse charge basis by the recipient of such service in respect of the services received by them the same is covered under clause (b) of sub-section (2) of Section 97 of the CGST Act, 2017 and is admissible. 7.17. SI. No. 15 of Notification No. 13/2017 Central Tax (Rate) dated 28.06.2017 as inserted by Notification No. 22/2019 Central Tax (Rate) dated 30.09.2019 and amended by Notification No. 29/2019 Central Tax (Rate) dated 31.12.2019 reads as follows: - SI.No. Category of Supply of Services Supplier of Service Recipient of Service (1) (2) (3) (4) 15 Services provided by way of renting of any....
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....fter the completion of the work The provisions governing the time of supply of services and tax invoice are contained in Sections 13 and 31 of the CGST Act. The relevant provisions of Sections 13 and 31 of the CGST Act, 2017 are reproduced below; "SECTION 13, 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 provisions of this section. (2) The time of supply of services 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 period prescribed under section 32 or the date of receipt of payment, whichever is earlier; or (b) the date of provision of service, if the invoice is not issued within the period prescribed under section 32 or the date of receipt of payment, whichever is earlier; or (c) the date on which the recipient shows the receipt of services in his books of account, in a case where the provisions of clause (a) or clause (b) do not apply: Provided that where the supplier of taxable service receives an amount up to one thousand rupees in excess o....
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....registered person may not issue a bill of supply if the value of the goods or services or both supplied is less than two hundred rupees subject to such conditions and in such manner as may be prescribed; (d) a registered person shall, on receipt of advance payment with respect to any supply of goods or services or both, issue a receipt voucher or any other document, containing such particulars as may be prescribed, evidencing receipt of such payment; (e) where, on receipt of advance payment with respect to any supply of goods or services or both the registered person issues a receipt voucher, but subsequently no supply is made and no tax invoice is issued in pursuance thereof the said registered person may issue to the person who had made the payment, a refund voucher against such payment; (f) a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of section 9 shall issue an invoice in respect of goods or services or both received by him from the supplier who is not registered on the date of receipt of goods or services or both; (g) a registered person who is liable to pay tax under sub-section (3) or sub-section (4....
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....f the same through the returns in Form GSTR-3B furnished for the month in terms of Section 39 of the CGST Act read with Rule 61 of the CGST Rules and also report the details of the payment of tax in Table 11 of the return in Form GSTR-1 furnished for the month in terms of Section 37 of the CGST Act read with Rule 59 of the CGST Rules for adjustment of the tax paid on the advance at the time of issue of tax invoice. In view of the above-stated observations, following rulings are issued. RULING Question. 1: Whether Pure Services or composite supply services with material value less than 25% of total value provided by the contractors to KSEBL (being a Government Entity) are exempt from GST (Notification No, 12/2017-Central Tax (Rate) - Sl.No, 3, 3A)? Ruling: No ruling can be given since the question is not in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. Question 2: If the answer to the above is 'yes', whether the taxes already collected by the contractor from KSEBL and remitted to the department can be refunded to KSEBL? Ruling: Not relevant in view of the answer to Question No 1 above. ....