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2024 (8) TMI 61 - AAR - GSTDetermination of applicable rate of GST - supplementary invoice proposed to be issued, by the applicant for price escalation against the works contract services executed prior to 18.07.2022 - taxable @12% under N/N. 24/2017-Central Tax (Rate) dated 21.09.2017 (as amended from time to time) or 18% in view of the amendment to the said N/N. 3/2022-CT (Rate) dated 13.07.2022 read with Section 14 of CGST SGST Acts, 2017. HELD THAT - In the present case, services have been supplied before 18.07.2022 (before the change in rate of tax vide Notification No. 03/2022-CT (Rate) dated 13.07.2022 w.e.f. 18.07.2022) and no payment against price escalation has been made. Further, invoices are proposed to be issued. So, rate of tax can be decided in view of the provisions of Section 14(a) (i) of the CGST Act, 2017 which is 18%.
Issues: Determination of applicable GST rate for price adjustment invoices related to a works contract executed before a change in GST rate.
Analysis: 1. Issue Identification: The Applicant sought a ruling on the applicable GST rate under CGST and SGST Acts for price adjustment invoices related to a works contract executed before a change in the GST rate. 2. Applicable Provisions: The Applicant referred to Notification No. 24/2017-Central Tax (Rate) for the initial GST rate of 12% and the subsequent amendment through Notification No. 03/2022-CT (Rate) for the revised rate of 18%. 3. Applicant's Submission: The Applicant, a subsidiary of Voltas Ltd., executed a works contract for the RWSS, Govt, of Odisha, with a provision for price variation based on raw materials and labor charges. The Applicant invoiced at 12% GST before the rate change and is yet to issue price adjustment invoices. 4. Legal Interpretation: Section 14 of the CGST Act, 2017, deals with the time of supply in case of a change in the GST rate. The section outlines scenarios based on the timing of supply, invoice issuance, and payment receipt to determine the applicable rate of tax. 5. Decision Making: The Authority admitted the application for consideration and analyzed the events of supply, invoice issuance, and payment receipt to determine the GST rate. In this case, as services were supplied before the rate change and invoices are proposed to be issued after the change, the applicable rate was determined to be 18% (CGST @ 9% & SGST @ 9%). 6. Final Ruling: The Authority ruled that the applicable GST rate for price adjustment invoices related to the works contract executed by the Applicant for the RWSS, Govt, of Odisha, would be 18% (CGST @ 9% & SGST @ 9%). 7. Appeal Process: The Applicant or the jurisdictional officer can appeal to the Odisha State Appellate Authority for advance ruling within 30 days if aggrieved by the ruling. This detailed analysis of the judgment provides a comprehensive understanding of the legal interpretation and decision-making process involved in determining the applicable GST rate for price adjustment invoices in the context of a works contract executed before a change in the GST rate.
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