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2021 (8) TMI 673 - AAR - GSTLevy of service tax - amount received from the PWD Department as per revised estimate in respect of work namely Construction of bridge across Kumaradhara river on Kudmar Shanthimogru Sharavoor Alankar Road - liability to collect and pay goods and services tax on amount received from the Executive Engineer, Public Works, Inland Water Transport Department, Mangalore Division - levy of Goods and Service Tax under the GST Act or VAT Tax under Karnataka Value Added Tax Act? - time of supply. HELD THAT - The invoices for the transactions are issued after the appointed date and the above invoices should be deemed to have been issued in respect of an outward supply made under the GST Act . Hence the turnovers on which the question is raised by the applicant are deemed to be the turnovers under the GST Act and not under the VAT Act - it can be said that the above turnovers are liable to tax at the appropriate rates under the GST Act. There is no question of the same being taxed under the earlier KVAT Act. Hence, the applicant is liable to charge GST on the said amount and is entitled to collect the same from the recipient of the service. The TDS amount deducted by the Department could be utilised by the applicant while making the payment of the liability but that does not preclude him from paying the tax. Time of supply - HELD THAT - Section 142(2)(a) of the CGST Act requires the applicant to issue a tax invoice within 30 days from the date of price revision and if the tax invoice is issued within the stipulated time limit, then the date of issue of invoice would be the time of supply for the additional price revision and in case the tax invoice is not issued within the stipulated time, then the time of supply would be the date of price revision. In case where the payment is received earlier to these dates, then the date of receipt of payment would be the time of supply as per Section 13 of the CGST Act.
Issues Involved:
1. Liability to collect and pay GST on the amount received from the PWD Department as per revised estimates for work executed prior to 01.07.2017. 2. Liability to collect and pay GST on the amount received from the Executive Engineer, Public Works, Inland Water Transport Department, Mangalore Division. 3. Determination of whether the PWD Department is liable to pay GST under the GST Act or VAT under the Karnataka Value Added Tax Act. Detailed Analysis: 1. Liability to Collect and Pay GST on Amount Received from PWD Department as per Revised Estimates: The applicant, a PWD Contractor, completed the construction of a bridge and approach road before the implementation of GST on 01.07.2017. The revised estimate for the project was approved post-GST implementation, and supplementary agreements were executed accordingly. The applicant received payments of ?5,56,285 and ?1,48,26,658, with TDS deducted at 1% under CGST and 1% under SGST. Section 142(2)(a) of the CGST Act mandates that any upward price revision post-GST implementation for contracts entered into prior to the appointed day should be treated as an outward supply under the GST Act. Thus, the turnovers in question are deemed to be under the GST Act, not the KVAT Act. Consequently, the applicant is liable to charge GST on these amounts at the rate of 12% (6% CGST and 6% SGST). 2. Liability to Collect and Pay GST on Amount Received from Executive Engineer, Public Works, Inland Water Transport Department, Mangalore Division: The applicant raised a tax invoice dated 01.04.2018 for ?5,56,285 with applicable CGST and SGST. The Authority ruled that if these payments are for additional supplies made under different agreements but related to the same contract, they would be liable to GST. The applicant must collect and remit GST on these amounts, utilizing the TDS deducted by the PWD Department to discharge the tax liability. 3. Determination of PWD Department's Liability to Pay GST or VAT: The Authority clarified that the applicant must issue a tax invoice within 30 days from the date of price revision as per Section 142(2)(a) of the CGST Act. If the invoice is issued within this period, the time of supply is the invoice date; otherwise, it is the date of price revision. If payment is received earlier, the time of supply is the payment receipt date per Section 13 of the CGST Act. Conclusion: The applicant is liable to collect and pay GST at the rate of 12% on amounts received from the PWD Department and the Executive Engineer, Public Works, Inland Water Transport Department, Mangalore Division. The turnovers are deemed to be under the GST Act, and the applicant can utilize the TDS deducted by the PWD Department to discharge the tax liability. The time of supply is determined based on the issuance of the tax invoice or the receipt of payment, as stipulated under the CGST Act. Ruling: 1. The applicant must collect and pay GST at 12% on the revised estimate amount received from the PWD Department. 2. The applicant is liable to collect and pay GST on the amount received from the Executive Engineer, Public Works, Inland Water Transport Department, Mangalore Division.
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