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TMI Blog2020 (3) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by them and is, therefore, deemed to have supplied works contract service to CMC prior to 1-7-2017 to the extent covered by the Mobilisation advance that stood credited to its account as per Section 13 of the GST Act. Whether GST is to be paid on the amount raised in the RA Bill periodically post implementation of GST, without deducting the part of mobilisation advance adjusted in the bills raised or the liability to GST is to be arrived at after deducting the part of Mobilisation advance being adjusted in the RA bill. The applicant has stated that their case is covered under the provisions of Section 142(11)(c) and accordingly, the liability to GST arises inclusive of that part of advance sought to be adjusted against the receivables in a particular RA Bill. It can be deduced that Section 142(11) (c) is applicable in cases with respect to transactions in which both VAT and Service Tax are paid in the Pre-GST regime and on which GST would be leviable to the extent supply is made after the appointed date for the recipient who has actually paid the tax. In the case at hand, the applicant has paid Service Tax on the advance received as per the said statute for which the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce Ruling on the following questions: 1. Whether the Transitional Provisions under Section 142(11)(c), (Chapter XX) of TNGST Act, 2017/CGST Act, 2017 is correctly applicable for the remaining installments of Mobilization Advance , which transitioned into the GST regime and to be adjusted/deducted by THE APPLICANT post the implementation of GST (i.e. Post July 1, 2017) 2. Whether, THE APPLICANT would be liable to pay GST, under the provisions of the TNGST Act, 2017/CGST Act, 2017 and allied laws, on the installments of the Mobilization Advance , which has transitioned into the GST regime and adjusted deducted by THE APPLICANT post the implementation of GT (i.e. post July 1, 2017) 3 Whether, THE APPLICANT would be eligible to avail Input tax Credit (ITC) on Service Tax paid which was transferred from Pre-GST period through TRAN-1 Return filed in terms of the section 142(11)(c), under Transitional Provisions (Chapter XX) of both TNGST Act, 2017/CGST Act, 2017. The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted a copy of Challan evidencing payment of application fees of ₹ 5,000/- each under sub-rule (1) of Rule 104 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Act (i.e. TNGST Act, 2017/CGST Act, 2017) shall be payable, on the supplies made after July 1, 2017, and the taxpayer would be allowed to avail the credit of VAT or Service Tax paid under the erstwhile taxation laws. The applicant is of the view that the portion of Mobilisation advance transited into GST regime would get covered under Section 142(11)(c) of CGST Act/TNGST Act 2017. The applicant has stated that their client Christian Medical College, Tamil Nadu, India (herein after CMC) has disputed this and they are of the opinion that the portion of the Mobility Advance transited into GST regime would get covered under Section 142(11)(b) of the TNGST Act, 2017/CGST Act, 2017 as Service tax was leviable on Mobilization Advance paid for Works Contract, under Chapter V of the Finance Act, 1994 and no VAT was paid and as such no GST shall be payable on this under the TNGST Act, 2017/CGST Act, 2017. 2.3 Regarding the question of whether the applicant would be eligible to avail Input Tax Credit (ITC) which was transferred from Pre-GST period through TRAN-1 Return filed in terms of the Section 142(11)(C), of both TNGST Act, 2017/CGST Act, 2017 , the applicant has stated that whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . They stated that they have charged Service Tax on the advances and adjusted amounts during Jan- June 2017, while for the monthly billing for VAT they have paid VAT for the which have not been billed separately. They have availed regular scheme of deemed sale value under VAT regime and stated further that they have not paid VAT on the mobilization advances as it is not required. They also submitted that for question (1), the relevant supplies are supplies made for RA bills for the months of July 2017 onwards. For question (2), the supplies are Running Bills from Jan 2017 to June 2017. They stated that they have paid the Service Tax on the mobilization advance in the months of October -December 2017 return and sought to submit Copies of the return with working sheet in a weeks time. 3.3 Further to the above hearing, the applicant submitted written submission on 01.08.2019 stating that as a supplier of Works Contract involving both goods and services, they have paid service tax on the entire amount of advance received during Pre-GST period whereas they continued to supply works contract service during GST regime and a portion of Advance (received during Pre-GST period) was to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c), (Chapter XX) of TNGST Act, 2017/CGST Act, 2017 is correctly applicable for the remaining installments of Mobilization Advance , which transitioned into the GST regime and to be adjusted/deducted by THE APPLICANT post the implementation of GST (i.e. Post July 1, 2017) 2. Whether, THE APPLICANT would be liable to pay GST, under the provisions of the TNGST Act, 2017/CGST Act, 2017 and allied laws, on the installments of the Mobilization Advance , which has transitioned into the GST regime and adjusted deducted by THE APPLICANT post the implementation of GT (i.e. post July 1, 2017) 3. Whether, THE APPLICANT would be eligible to avail Input tax Credit (ITC) on Service Tax paid which was transferred from Pre-GST period through TRAN-1 Return filed in terms of the section 142(11)(c), under Transitional Provisions (Chapter XX) of both TNGST Act, 2017/CGST Act, 2017. 6. Section 97(2) of the CGST Act / Tamil Nadu GST Act (TNGST) gives the scope of Advance Ruling Authority, i.e., the question on which the Advance Ruling can be sought. For ease of reference, the section is reproduced as under: 97 (2) The question on which the advance ruling is sought under this Act, sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 Returns for the half-year October 2016-March 2017. The applicant has received the Tranche 2 of the advance of ₹ 7,91,86,000/- in the month of March 2017, which is inclusive of Service tax and cess of ₹ 44,82,227/-(on the 40% of the advance received). They had issued Tax invoice No. CMC/1349/Mob.Adv.02/ 16-17/16 dated 04.03.2017 and has paid the service tax and cess of ₹ 44,82,227/- as reflected in the statements. The applicant has paid the service tax as per the Point of Taxation in respect of services during Pre-GST Regime. The applicant has issued Tax Invoice as per the Service Tax Law mentioning the advance value and service Tax with CESS to their customer. Thus as far as the applicant is concerned, we find that they have received the advance for execution of original works and had paid service tax cess on the 40% of the total value after claiming abatement available under the law. It is also seen that no VAT is paid on the advance received. However, it is seen that on the RA bills raised during the Pre-GST regime, the VAT/WCT payable has been raised while the Advance received has been considered against payment for the works executed during the said period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the date of payment is the date on which it is entered into the books of account of the supplier, i.e, the applicant. In the case at hand the applicant has raised the invoice to the full Mobilisation Advance received by them and is, therefore, deemed to have supplied works contract service to CMC prior to 1-7-2017 to the extent covered by the Mobilisation advance that stood credited to its account as per Section 13 of the GST Act. 7.3 The first and the second question is as to whether GST is to be paid on the amount raised in the RA Bill periodically post implementation of GST, without deducting the part of mobilisation advance adjusted in the bills raised or the liability to GST is to be arrived at after deducting the part of Mobilisation advance being adjusted in the RA bill. The applicant has stated that their case is covered under the provisions of Section 142(11)(c) and accordingly, the liability to GST arises inclusive of that part of advance sought to be adjusted against the receivables in a particular RA Bill. Section 142(11) of the Act is given below for ease of reference: (a) notwithstanding anything contained in section 12, no tax shall be payable on goods und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he component of service tax but no VAT has been paid/received from their customer on that part of the Mobilisation Advance pertaining to materials and therefore, this provision do not apply to the case at hand. Accordingly, we hold that the transitional provisions under Section 142(11)(c) is not applicable to the case of the applicant. 7.4 Further Supply of Works Contract is deemed to be a service under GST. Under the pre-GST regime, service tax was leviable on the service portion of the Works Contract, which in the case at hand being original work, was levied on 40% of the value. The applicant on receipt of advance has paid the service tax on the 40% of the value as required under the provisions of Service Tax. The like situations are more aptly covered under the transition provision at Section 142(11)(b) wherein it is stated that no tax is payable on services under the GST Act to the extent the tax was leviable on the said services under Chapter V of the Finance Act. Therefore, we conclude that GST is not payable on the Mobilisation advance which has been received prior to GST implementation as per Section 142(11)(b) of the Act. 7.5 The applicant has further sought to kno ..... X X X X Extracts X X X X X X X X Extracts X X X X
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