9911796707
TMI Blog2022 (4) TMI 404X X X X Extracts X X X X X X X X Extracts X X X X ..... he applicant, seeking an advance ruling in respect of the following question. NHAI has awarded a contract for construction of road to the applicant vide letter dt 01.05.2017 for agreed price of Rs. 65,90,98,099/- which included VAT Tax as tender was awarded before the appointed date. However, during the course of completion of service, i.e. construction of road as per contract, there happens escalation in value. Such escalation in value is added to the contract value as per the terms of the tender notice which read as under: 19.10.04:- The contract price shall be adjusted for increase or decrease in rates and price of labour, cement, steel, plant, machinery and spares, bitumen, fuel and lubricants and other material inputs in accordance w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and recipient of the supply are not related and the price is the sole consideration for the supply. 2.3 The value under Section 15 also includes escalated value which is being recovered from NHAI. When applicant is incurring extra amount for provision of service, the same being allowed to be added to contract price, and applicant is also recovering the same from NHAI. Hence, such escalated price which is added to contract price shall be liable for payment of GST as per the said provision. Applicant Submission dated 08.02.2022 2.4 The applicant is engaged in construction of Public Road for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la to calculate the increase or decrease in price. 2.8 Thus, if there is the escalation in value of service, whether such escalated value shall be added to taxable value under Section 15 of CGST Act, 2017 or otherwise? Interpretation of Law:- 2.9 In the instant case, the contract was awarded prior to appointed date but was executed after the appointed date, hence the relevant provisions of CGST Act, 2017 shall be applicable. So far as GST liability is concerned, the liability to pay tax on services shall arise at the time of supply, as determined in accordance with the provisions of Section 13(1) of the CGST Act, 2017. 2.10 In the instant case, earliest thing that has happened is "provision of service", therefore, time of supply service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having attended the preliminary hearing as well as the final hearing, has not made any written submissions in the matter. 5.2 Briefly stated, M/s. B P Sangle Constructions Pvt. Ltd., the Applicant was awarded a contract by NHAI for construction of roads during the pre-GST period but the contract was executed only after the GST Laws introduced in the country. Further, as per the submissions there was an escalation in the contract value and accordingly, the applicant has raised the question whether GST has to be paid on the enhanced value also. Since the impugned supply was started and undertaken by the applicant only during the GST period, we are of the opinion that the GST Laws will be applicable in the instant case and therefore the rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 section 31 or the date of receipt of payment, whichever is earlier; or c. .............................. Provided that........................ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, such escalated price/value which is added to contract price shall be liable for payment of GST as per the said provision of Section 15 of the Act. 5.5.3 As per the provisions of Section 15(1) of CGST Act, 2017, the actual transaction value which includes the escalated value should be considered for payment of tax under GST Laws. We find that the applicant is also in agreement with the same. 06. In view of the extensive deliberations as held hereinabove, we pass an order as follows: ORDER (Under Section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) For reasons as discussed in the body of the order, the questions are answered thus - Question: - NHAI has awarded a contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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