9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (3) TMI 1146 - AAR - GSTLevy of GST - time of supply - Mobilization Advance received by it for construction services provided by it - CGST Act, 2017 - SGST Act, 2017 - HELD THAT - There are no ambiguity that Time of Supply of Service on advances received is date of its receipt - there are no merit in SPSC submission to defer the payment of Tax on Advances till the stage of issue of invoice. This leads to delayed payment of Tax on advance received. Time of Supply envisaged in the Section 13(2) CGST Act has addressed this issue. On reading the Receipt voucher no RTGS 223033 dated 8-2-21, the recipient deducted TDS under Section 51 CGST Act on the said advance which denotes that advance is not in the nature of deposit as submitted by SPSC, but rather is against the value of supply agreed to be made - The scope of work as per contract is works contract service, and it is held that all three advances are advances received by SSPC under the Service Supply Contract. Thus, Time of Supply, on said Advances received by SPSC for Supply of its Service, is the date of receipt of said advance.
Issues Involved:
1. Taxability of Mobilization Advance under GST. 2. Determination of the Time of Supply for GST purposes on Mobilization Advance received by SPSC. Issue-wise Detailed Analysis: 1. Taxability of Mobilization Advance under GST: SPSC, engaged in construction services, receives Mobilization Advance from the Government for project mobilization. The advance is interest-bearing and secured by a bank guarantee. SPSC contends that this advance is a deposit, not subject to GST until applied as consideration in invoices. SPSC argues that Mobilization Advance is not a payment towards service supply but a financial assistance, thus not taxable at receipt. They cite Section 2(31) of the CGST Act, which excludes deposits from consideration unless applied for supply. They reference definitions and case laws distinguishing deposits from payments, asserting that the advance retains the character of a deposit until adjusted in invoices. 2. Determination of the Time of Supply for GST purposes on Mobilization Advance received by SPSC: The core issue is whether GST should be deferred until the issuance of invoices or applied at the receipt of the advance. SPSC maintains that GST should be levied only when the advance is adjusted in invoices, not at receipt. The authority examines the statutory provisions, specifically Section 13(2) of the CGST Act, which states that the time of supply for services is the earliest of the invoice date or payment receipt date. The explanation to Section 13(2) deems supply to have been made to the extent covered by payment or invoice, indicating that GST liability arises at the receipt of the advance. The authority notes that Notification No. 66/2017 exempts advances for goods but not services, reinforcing that advances for services are taxable at receipt. They emphasize that the GST law's deeming provision mandates tax on advances at receipt, irrespective of service provision timing. The authority dismisses SPSC's reliance on Service Tax era case laws, noting that GST provisions explicitly address the time of supply for advances. They highlight that SPSC's accounting practices and contractual terms support the classification of the advance as consideration upon receipt. Findings: The authority concludes that the Mobilization Advance received by SPSC is taxable at receipt under GST law. They reject the argument for deferring GST until invoice issuance, emphasizing statutory requirements for immediate tax liability on advances for services. Ruling: The authority rules that the time of supply for the Mobilization Advance received by SPSC is the date of receipt of the advance, aligning with Section 13(2) of the CGST Act.
|
