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TMI Blog2019 (8) TMI 1285X X X X Extracts X X X X X X X X Extracts X X X X ..... ect from 1 st July 2017. From 1 st July 2017 onwards, the liability to pay GST on supply of services is determined by the time of supply in Section 13 - In the instant case, the applicant has collected an amount as interest/ late fee/ penalty for the delayed payment of consideration for the original service. This amount was received after 1 st July 2017 and separate invoices Rent Claim Advance (RCA) Receipt are raised by the applicant. There is a payment of a separate consideration for this tolerance of delayed payment of lease / rent. This payment is a part of the contract for supply of services of the applicant to the port user in the course of their business. It can be said that as the applicant has tolerated the delayed payment of consideration of lease/ rent which the recipients should have paid much before. Therefore, this tolerance on the part of the applicant for the delayed payment of lease/ rent by collecting an interest/ late fee / penalty is a separate supply of service as covered under Section 7 (1) (a) of the Acts. The service namely agreeing to tolerate an act, is squarely covered under the classification scheme of the services. Further, the consideration fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.02.1975. The affairs of the applicant are administered by a Board constituted by the Central Government from time to time as per the provisions of Major Port Trusts Act, 1963. The applicant is functioning under the administrative control and supervision of Ministry of shipping of Government of India. 3. The applicant, has stated that there are quite a few cases where they have raised invoices during Service Tax regime and paid the service tax as per the then existed POT rules, but they are receiving interest, late fee, penalty in the GST regime for the reason that consideration for such services are received belatedly. The question raised in the advance ruling application is to determine whether GST is payable in respect of the receipt of interest, late fee, penalty by the applicant. The applicant has stated that their interpretation of law is that the amounts received on or after 01.07.2017 towards interest, late fee penalty relating to the services other than Continuous Supply of Services(CSS) rendered before 01.07.2017 are not liable to GST; and the amounts received on or after 01.07.2017 towards interest, late fee penalty relating to CSS rendered by them before 01.07 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply of service is effective from 01.07.2017 and the penalty and late fee were levied under the existing law. 7. We have carefully considered the submissions made by the applicant in the advance ruling application, the additional submissions made during the personal hearings and the comments furnished by the State Jurisdictional Officer. The authorized representative of the applicant vide their letter dated 26.10.2018 has furnished the Rent Claim Advance(RCA) Receipt raised/ issued by the applicant claiming penalty on port users with respect of the belated receipt of license fee/ lease rent pertaining to the period prior to 01.07.2017. On perusal of the RCA, a Note is appended on the RCAs which state that 'Penal Interest will be charged for the total amount from the duc date till the date of payment as per SoR'. Further, the description on the RCA reads as 'Penal interest along with GST towards delayed remittance now adjusted', 'Encroach penalty for OSD MG 248.50 SQM for Sept 2018'. It is further seen from the note in file G1/Oil/IOC/2017 /TC, that IOC has been allotted space on lease basis inside the custom bond area and IOC has an outstanding d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce is issued within the period prescribed under sub-section (2) of section 31 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 sub-section (2) of section 31 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: As per the above the provisions of Section 13 of CGST and TNGST Act come into effect from 1 st July 2017. From 1 st July 2017 onwards, the liability to pay GST on supply of services is determined by the time of supply in Section 13. In the instant case, the applicant has stated that the invoices for the supply of services have been issued before 1st July 2017 but the payment of the consideration was received late i.e. after the issue of invoice. Hence, the date of issue of invoice which is earlier is the time of supply as per Section 13(2) (a) of CGST and TNGST Act. In this case the time of supply would be before 1st July 2017 and accordingly the supply of origina ..... X X X X Extracts X X X X X X X X Extracts X X X X
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