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TMI Blog2019 (10) TMI 1204X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, if there is no such provision made in the agreement it can be said that the supply is not 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 - in case where the contract contains provisions for continued supply of service even after expiry, it is a continuous supply of service - 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 Rent Claim Advice by the supplier and the date of receipt of payment. In respect of cases where there is no such provision regarding continued supply of service after expiry of contract, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artial amount as payment. In these case too, it will apply as the date of payment of full consideration is the date of reckoning of the date of payment. . - Order No. 44/AAR/2019 - - - Dated:- 26-9-2019 - MS. MANASA GANGOTRI KATA, IRS AND THIRU. KURINJI SELVAAN V.S., M.SC., (AGRI.), M.B.A., MEMBER, Note: Any appeal against the advance ruling order shall be filed before the Tamil Nadu State Appellate Authority for Advance Ruling, Chennai under Sub-section (1) of Section 100 of CGST ACT/TNGST Act 2017 within 30 days from the date on which the ruling sought to be appealed against is communicated. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act. M/s. Chennai Port Trust, No.1, Rajaji Salai, Chennai-600001, (hereinafter called the Applicant) is engaged in supply of port ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ras High Court, etc. This licensing normally falls under the definition of Continuous supply of Service since the licensing is normally done for a minimum period of 11 months and goes up to 30 years as provided in Major Port Trusts Act 1963. There are many cases where the license agreement is not renewed on its expiry, but the licensee continues to occupy the licensed premises. In such a situation, the applicant does not issue a tax invoice containing the particulars mentioned in Section 31 of CGST Act 2017, but issues a reminder letter to pay monthly fee based on the expired license agreement. In most of these cases, the license agreement is signed only by the applicant and not by the licensee. They do not take legal action to vacate the licensee but takes action for recovery of license fee through proper channels as per the directions of the Central Government varying from time to time, namely earlier it was committee on Disputes (CoD), later it became Permanent Machinery for Arbitration (PMA) and now it is being changed to Two Tier Settlement System (TTSS). In many cases, the arrears of license fee payable to them is either waived or reduced substantially at a later date as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CGST Rules 2017 vi. The date of completion of each and every event in cases where payment to the applicant is linked to the completion of an event u/s 31(5)(c ) -It is not possible to determine TOS under this situation since the term Completion of event used in the criteria is not defined in the Act or in the Rules and that the amounts to be received by the applicant are not linked to completion of any event; but linked to completion of time as per the license agreements. Completion of time is NOT Completion of event , a term used in Section 31(5) (c). They submitted sample Rent Claim Advice sent to Coast Guard and Customs raised monthly for the renting out of Storage of Pollution Control Equipments and Sheltering Staff respectively. 4.1 The Applicant was granted personal hearing on 24.09.2018 in respect of the above application. The applicant represented through authorized representative. The submissions during the hearing are as under:- Sample lease agreement for renting of immovable property, rent claim advice will be submitted. The rent claim advice is raised monthly if lease agreement is valid, when it is expired it is renewed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either to renew the agreement or to take steps to vacate the licensee. It is the dispute between two individual parties. Under the Income Tax Act once bill is raised and money consideration is not received it is treated as income and income tax is worked out. Similarly it is the duty of the applicant to raise invoices till the assessee vacates the premises and declare the turnover under the GST Act and pay the tax due thereon whether or not the licensee has paid the amount. The definition of time of supply or continuous supply of service relied under Section 31 is not applicable in the case of breach of contract. The applicant has to raise invoice and declare the turnover where agreement was not renewed. Wherever, the applicant receives adhoc payment the applicant has to declare the amount as per agreement and pay the tax. The litigation may be continued by way of appeal, arbitration etc., and the Government need not wait till the disposal of individual disputes. 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 J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expiry but the licensee continues to occupy the licensed premises. 8.2 Section 7 of CGST/TNGST Act states:- 7. (1) For the purposes of this Act, the expression supply includes,- .............................................. (d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II. SCHEDULE II ACTIVITIES TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES 5. Supply of services The following shall be treated as supply of services, namely:- (a) renting of immovable property; It is seen that renting of immovable property is a supply of service by virtue of the Schedule II. Continuous supply of Service is defined under section 2(33) of CGST /TNGST Act as follows:- continuous supply of services means a supply of services which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, for a period exceeding three months with periodic payment obligations and includes supply of such services as the Government may, subject to such conditions, as it may, by notification, specify In res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a prescribed period, issue a tax invoice, showing the description, value, tax charged thereon and such other particulars as may be prescribed: ...................................... (5) Subject to the provisions of clause (d) of sub-section (3), in case of continuous supply of services,- (a) Where the due date of payment is ascertainable from the contract, the invoice shall be issued on or before the due date of payment; (b) Where the due date of payment is not ascertainable from the contract, the invoice shall be issued before or at the time when the supplier of service receives the payment; (c) Where the payment is linked to the completion of an event, the invoice shall be issued on or before the date of completion of that event. Rule 46 of the CGST/TNGST Rules, provides the details to be available in the Tax Invoice. 46. Tax invoice.- Subject to rule 54, a tax invoice referred to in section 31 shall be issued by the registered person containing the following particulars, namely,- (a) name, address and Goods and Services Tax Identification Number of the supplier; (b) a consecut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n force but the licensee continues to be in Possession and occupation of the immovable properties: The applicant has stated that in all cases of expired lease, they issue a reminder letter or Rent Claim Advice periodically to pay monthly fee based on the expired license agreement. The applicant has furnished copy of Rent Claim Advice issued, the perusal of which we find that it contains the Name, address, GSTIN Number of the applicant, RCA No., date, Name of the Recipient and Address for correspondence, GSTIN, SAC No. Area Type/ Rate, Location, Allot Date, Exp, Date, Description of the activity, Licence fee, GST along with a note that the above services are not liable for GST under Reverse Charge Mechanism. As per Section 31(2), in respect of a registered person supplying taxable service has to issue a tax invoice before or after the provision of service, showing the description, value, tax charged and such other particulars as may be prescribed. On comparison, the RCA being issued has all the details required to be mentioned in a Tax Invoice and it is nothing but Tax Invoice under Section 31 of the Act. It is seen from the lease agreement with Customs, there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f supply of service. In the instant case the applicant issues RCA on monthly basis for the rent/ fee pertaining to a specific month. If such RCAs are issued within thirty days after the end of recurrent period specified in the agreement after which the rent/license fee is to be paid ,for which the rent is being sought, it can be said that they are issued within the prescribed period as per Section 31 (2) and the Time of supply is determined by Section 13(2) (a), as the earliest of the date of issue of invoice or Rent Claim Advice by the supplier and the date of receipt of payment as the invoice is issued within the period prescribed. If the RCAs are issued more than thirty days after the end of the month for which the rent is being sought, it can be said that they are not issued within the prescribed period and 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 recurrent period specified in the agreement after which the rent/license fee is to be paid and the date of receipt of payment, whichever is earlier. 8.5 The second question is (ii) The license is in force, but the licensee does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he applicant with the period prescribed in Section 31(5) and the Time of supply as determined by Section 13(2)(a), as the earliest of the date of issue of Rent Claim Advice by the supplier and the date of receipt of payment. In respect of cases where there is no such provision regarding continued supply of service after expiry of contract, if such RCAs are issued within thirty days after the end of recurrent period specified in the agreement after which the rent/license fee is to be paid for which the rent is being sought., the Time of supply as determined by Section 13(2)(a), as the earliest of the date of issue of invoice or Rent Claim Advice by the supplier and the date of receipt of payment. If the RCAs are issued more than thirty days after the end of the month for which the rent is being sought, the Time of supply as determined by Section 13(2)(b), as the earliest of 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 and the date of receipt of payment, whichever is earlier. ii. In the scenarios of the license for renting of immovable property is in force, but the li ..... 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