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TMI Blog2018 (10) TMI 1146X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017, within a period of 30 days from the date of service of this order. The issue raised by M/s. Nagaur Mukangarh Highways Pvt. Ltd. (hereinafter referred as the applicant also) is fit to pronounce advance ruling as it fails under ambit of the Section 97(2) (a), it is given as under: (d) Admissibility of input tax credit of tax paid or deemed to have been paid. Further, the applicant being a registered person, GSTIN is 08AAFCN4743H1ZO, as per the declaration given by him in Form ARA-01, the issue raised by the applicant is neither pending for proceedings nor proceedings were passed by any authority. Based on the above observations. the application is 'admitted' to pronounce advance ruling. 1. SUBMISSION OF THE APPLICANT: (a) The Applicant also having Goods and Service Tax (GST) Registration Number 08AAFCN4743H1ZC has been engaged as a 'Concessionaire' wherein the Public Works Department (PWD), Government of Rajasthan has granted concession to construct, operate and maintain the project during the Construction Period which shall commence from the appointed date and will end on Commercial Operation Date (COD) and operate and maintain it for further period of 10 years from the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey reiterated the submissions already made in the Advance Ruling Application and requested that the case may be decided at earliest. 5. issues to be decided : The applicant has sought advance ruling as to whether they are eligible to: (a) Claim full ITC pertaining to procurement of goods and services for construction of the project during the Construction Period, as the entire revenue received during the said period is subject to GST; and (b) Claim ITCs pertaining to procurement of goods and services during the O & M period after reversal of ITC as per Section 17(2) of the Central Goods and Services Tax Act, 2017 read with Rule 42 of the Central Goods and Services Tax Rule, 2017 as Annuity Payment received during the said period is exempt whereas 0 & M payments received are subject to GST. 6. Comments of Jurisdictional Officer:- The Jurisdictional Deputy Commissioner of Works & Leasing Tax, Udaipur vide his letter 6.09.2018 submitted that the services provided by the applicant is classifiable under SAC 9954 i e. composite supply provided to Central Government or any other local body for construction of civil structure. The Services by way of access to a road or a bridge on pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods and services during the O & M period after reversal of ITC as per Section 17(2) of the Central Goods and Services Tax Act. 2017 read with Rule 42 of the Central Goods and Services Tax Rule. 2017 as Annuity Payment received during the said period is exempt whereas O & M payments received are subject to GST. 7.3 Before deciding the issue, it would be appropriate to appreciate the legal provision 'in this regard It is a fact that the applicant is providing the services of construction of roads and bridges on design, build, operate and transfer (DBOT) basis which is a composite supply as defined under clause 30 of section 2 of the CGST Act, 2017 which reads as under: "composite (30) supply' means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply; 7.4 Further, these supplies are in relation to construction of immovable property like roads and bridges and it can be termed as 'Work Contract' in terms of Section 2(119) of CGST Act, 2017 which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o such excess amount. Explanation.--For the purposes of clauses (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; (ii) "the date of receipt of payment" shall be the date on which the payment is entered in the books of account of the supplier or the date on which the payment is credited to his bank account, whichever is earlier. in view of the above the applicant is liable to pay tax at the time of issue of invoices or receipt of the payment whichever is earlier 7.7 The applicant is also awarded the work of Operation & Maintenance of the said project for the period of 10 years, During this period, the applicant will also receive 50% of the project cost, as annuity, alongwith interest. The applicant contended that the said annuity is exempted under entry No. 23A of the Notification 12/2017-CT (rate) dated 28.06.2017. The contention of the applicant is not tenable as entry No 23A ibid pertains to SAC 9967 which is for support services of transport services whereas the services provided by the applicant is classifiable under SAC 9954 which is liable to tax at the applicable rate of GST. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), or avail of, every month, an amount equal to fifty per cent. of the eligible input tax credit on inputs, capital goods and input services in that month and the rest shall lapse: Provided that the option once exercised shall not be withdrawn during the remaining part of the financial year: Provided further that the restriction of fifty per cent. shall not apply to the tax paid on supplies made by one registered person to another registered person having the same Permanent Account Number. (5) Notwithstanding anything contained in sub-section (1) of section 16 and subsection (1) of section 18, input tax credit shall not be available in respect of the following, namely:- (a) motor vehicles and other conveyances except when they are used-- (i) for making the following taxable supplies, namely:- (A) further supply of such vehicles or conveyances ; or (B) transportation of passengers; or (C) imparting training on driving, flying, navigating such vehicles or conveyances; (ii) for transportation of goods; (b) the following supply of goods or services or both:- (i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery excep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and structural supports but excludes- (i) land, building or any other civil structures; (ii) telecommunication towers; and (iii) pipelines laid outside the factory premises. 7.10 The applicant is providing 'work contract service' for construction of road and the issue is to be clarified whether they are restricted to claim input Tax Credit in terms of clause (c) or (d) of sub-section 5 of section 17 ibid. in the given circumstances we find that the above restriction is not applicable the applicant is a supplier of works contract services for construction of an immovable property and goods and services received by them for construction of immovable property are not owned and capitalised by them, hence restriction contained under clause (c) & (d) ibid is not applicable for the applicant. 7.11 in the given facts and circumstances; we agree with the contention of the applicant for the first question that they are entitled to claim full ITC during the construction period. The applicant is paying applicable GST on full value of the project and they are not supplying any exempted goods and services during the construction period of 2 years, therefore they are entitled to claim fu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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