9911796707
TMI Blog2019 (10) TMI 1204X X X X Extracts X X X X X X X X Extracts X X X X ..... pply of port services and incidental supply of goods like disposal of discarded assets. They are registered under GST with GSTIN 33AAALC0025B1Z9. They have preferred Application seeking Advance Ruling on the following questions:- Whether on the facts and in the circumstances given in the application, when the time of supply can be considered to occur with respect to providing continuous supply of services in the nature of renting immovable properties to Government, Government Agencies, Court in the following 3 situations.- i. The license has expired and not in force but the license continues to be in Possession and occupation of the immovable properties: ii. The license is in force, but the licensee does not pay the periodical license fee to the assessee as provided in the license agreement. iii. The license is in force, but the licensee pays a portion of the agreed license fee by them under the expired license agreement. The Applicant has submitted the copy of applications in Form GST ARA - 01 and also submitted the copy of Challans evidencing payment of Application Fees of Rs. 5, 000 per application - each under Sub-rule (1) of Rule 104 of CGST Rules 2017 and SGST Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stries after many years of arduous follow up. The applicant on the interpretation of the statutory provisions has stated that the TOS for CSS needs to be determined as the earliest of the following:- i. The date of receipt of payment by the applicant whether or not invoice is issued -U/S 13(1) (a); - they admit that TOS for CSS occurs when payment is received and to the extent of such receipt by treating the receipt as cum-tax ii. The date of provision of service if invoice is not issued within the period prescribed/s 31(2) [13(2) (b)j - is not possible since the agreed or originally agreed or normal license fee is waived at a later date by high level meetings at Ministry level. Consequently, determination of TOS on provision of services, namely determination of renting services in these cases on a month-on-month basis will lead to an anomalous situation of effectively levying and collecting GST from the assessee MORE THAN what is not required to be paid under GST Act, iii. the date on which the licensee shows the receipt of services in his books of account [13(2) (c)] - not possible since the applicant does not have access to the books of account of the licensees/ service re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sted for further hearing. 4.2 The applicant through their authorized representative furnished the following documents on 26.10.2018. The details of the documents furnished ARA wise are as under:- (TOS for CSS rendered to Government, Government agencies and Court):- (1) Copy of Letter No. WM7/02770/2015/E dated 17/10/2018 addressed to the Dy. Secretary to Government, Home (Police-12) Department, Got, Secretariat along with the draft agreement enclosed; (2) Copy of signed lease deed between the applicant and Chennai Customs for Handing over of New Container Freight Station at Chennai Port Trust. 5.1 As requested by the applicant and on account of change in the SGST Member of the authority, another personal hearing was extended on 22.02.2019. The applicant appeared through their Authorized Representative and stated as follows:- In respect of the renting of immovable property, they will provide category-wise details of date of invoice, payments received, provision of service dates in a typical license /contract of renting to decide on the time of supply. The applicant undertook to submit the documents in 2 weeks. The State jurisdictional officer appeared and submitted writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and accordingly, the applications are taken up for consideration. It is seen from the draft lease agreement with Principal Secretary, Home Department for accommodation provided to CISF personnel that the lease agreement is for a short fixed period as specified and the license fee is to be paid monthly. In the lease agreement with Customs for lease of land for Container freight station is for a long term lease with an upfront payment and rent to be paid annually. It is seen that there is a requirement of the lessee to pay lease rent or license fee periodically while they occupy the immovable property. During the currency of the lease agreement, the applicant issues an invoice periodically as required in the respective lease agreement but once the agreement is expired they issue a Rent Claim Advice or demand letter with the same periodicity. The question raised by the applicant in this application is as follows:- When the time of supply can be considered to occur with respect to providing continuous supply of services (CSS) in the nature of renting immovable properties to Government, Government Agencies, Court in the following 3 situations.- i. The license has expired and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase/ actual stay is more than three months, as is the case here, the service is a continuous supply of service. 8.3 Time of Supply of Service is provided under Section 13 of the GST Act, which is given under for ease of reference:- 13. (1) The liability to pay tax on services shall arise at the time of supply, as determined in accordance with the provisions of this section. (2) The time of supply of services shall be the earliest of the following dates, namely:- (a) the date of issue of invoice by the supplier, if the invoice 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:- Provided that where the supplier of taxable service receives an amount up to one thousand rupees in excess of the amount indicated in the tax invoice, the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the taxable supply is fifty thousand rupees or more; (f) name and address of the recipient and the address of delivery, along with the name of the State and its code, if such recipient is unregistered and where the value of the taxable supply is less than fifty thousand rupees and the recipient requests that such details be recorded in the tax invoice; (g) Harmonized System of Nomenclature code for goods or services; (h) description of goods or services; (i) quantity in case of goods and unit or Unique Quantity Code thereof; (j) total value of supply of goods or services or both; (k) taxable value of the supply of goods or services or both taking into account discount or abatement, if any; (l) rate of tax (central tax, State tax, integrated tax, Union territory tax or cess); (m) amount of tax charged in respect of taxable goods or services (central tax, State tax, integrated tax, Union territory tax or cess); (n) place of supply along with the name of the State, in the case of a supply in the course of inter-State trade or commerce; (o) address of delivery where the same is different from the place of supply; (p) whether the tax is payable on reverse charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot 'under a contract' and therefore, in such cases, the supply no longer qualifies under the definition of continuous supply. In respect of continuous supply of service, as per Section 31(5), the tax invoice should be raised on or before due date of payment if said due date is ascertainable from the contract. It is seen that in all cases the Rent Claim Advice issued by the applicant contains a due date of payment of the demand raised in the same. As discussed above, in case where the contract contains provisions for continued supply of service even after expiry, it is a 'continuous supply of service' .The Rent Claim Advice is issued based on the said provision of the contract and in such cases it can be said that the due date of payment, specified in the RCA, is ascertainable from the contract. In all cases, the RCA is issued before the due date specified in the RCA. Accordingly, in cases where there is a provision in contract for continued supply of services after expiry or termination of the contract, the invoice is issued with the period prescribed in Section 31 (5) and the Time of supply is determined by Section 13(2) (a), as the earliest of the date of issue of invoice or Ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the invoice is issued after such due date of payment, the Time of supply is determined by Section 13(2)(b), as the earliest of the date of provision of service which is the end of the period (monthly/annual etc. ) specified in the contract and the date of receipt of payment, whichever is earlier. If payment is not received, the time of supply shall be the date of provision of service which is the end of recurrent period specified in the agreement after which the rent/license fee is to be paid. 8.6 The last question is (iii) The license is in force, but the licensee pays a portion of the agreed license fee by them under the expired license agreement. The question is wrongly worded as if the license is in force, the licensee could not be paying any amount under the expired license agreement. The applicant means to ask regarding the case where the license is in force and instead of receiving the full consideration, they only get a partial amount as payment. In these case too the above as in Para 8.5 will apply as the date of payment of full consideration is the date of reckoning of the date of payment. 9. In view of the foregoing, we rule as under: RULING i. In the scenario of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
