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TMI Blog2023 (7) TMI 571X X X X Extracts X X X X X X X X Extracts X X X X ..... the total value provided by the contractors to KSEBL (being a Government Entity) are exempt from GST [Notification No.: 12/2017-Central Tax (Rate) - SI. No 3,3A]? - If the answer to the above is Yes, whether the taxes already collected by the contractor from KSEBL and remitted to the department can be refunded to KSEBL? - HELD THAT:- The applicant has sought the taxability of the services provided by the contractors to the applicant and hence the applicant is the recipient of the services. Therefore, the questions do not pertain to a transaction that is being undertaken or proposed to be undertaken by the applicant and hence do not fall within the purview of the definition of advance ruling. Further, it is categorically stated in Section 103 of the GGST Act that the ruling pronounced is binding only on the applicant and the jurisdictional authority of the applicant. Hence, if a recipient obtains a ruling on the taxability of his inward supply of goods or services or both the supplier of such goods or services and their jurisdictional authority is not bound by that ruling and the supplier and their jurisdictional authority is free to assess the supply according to their own. determ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... body corporate as defined in clause (11) of Section 2 of the Companies Act, 2013. Since the Notification No, 13/2017 CT (Rate) dated 28.06.2017 as amended is issued under sub-section (3) of Section 9 of the CGST Act, 2017 the applicant is liable to pay GST as the recipient of services in respect of the services of renting of any motor vehicle designed to carry passengers deceived from any person other than a body corporate not issuing invoice charging central tax at the rate of 2.5% / 6% as the case may be; during the respective periods irrespective of the status of registration of the supplier. Time of supply of the services, namely; Deposit Works supplied by the applicant - Applicability of clause (c) of sub-section (2) of Section 97 of the CGST Act - HELD THAT:- In terms of provisions of sub-section (2) of Section 31 of the CGST Act, 2017 read with Rule 47 of the CGST Rules, 2017 the applicant shall issue tax invoice in respect of the supply of services namely; Deposit Works within 30 days from the date of supply of the service. However, as the applicant is collecting the consideration as per the estimate prepared in advance from, the consumers, in view of the provisions contain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing cases; a) KSEBL is collecting GST on Work Deposits from the consumers and remits the same. The subject work is wholly outsourced by KSEBL to a third-party contractor and GST is paid to the contractor. Whether KSEBL can avail of Input Tax Credit on GST paid to the contractor? b) KSEBL is collecting GST on Work Deposits from the consumers and remits the same, KSEBL purchases the specific material separately and uses it in the work. Only labour is outsourced. GST is paid on material purchased and to the labour contractor. Whether KSEBL can avail of Input Tax Credit on GST paid on materials and on labour contract? c) KSEBL is collecting GST on Work Deposits from the consumers and remits the same. KSEBL has utilized the materials from the pool of materials in stock which is centrally procured earlier paying GST. Only labour is outsourced. GST is paid on materials at the time of purchase and to the labour contractor. Whether KSEBL can avail of Input Tax Credit on GST paid on materials and on labour contracts? 3.4 If direct credit cannot be availed by KSEBL, whether proportionate credit can be availed by KSEBL for the quantum of taxable services provided based on the data availab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the nature of composite service where value of supply of goods constitutes not more than 25% of the value of the said composite supply. At present, many contractors who are registered under GST providing pure services to the applicant in relation to the distribution of electricity are collecting GST from them, even if the services they provide are falling in the above category of services. 4.4 Regarding input tax credit on Deposit Works undertaken by them, they submit that as per Section 16(1) of CGST Act 2017; every registered person shall, subject to such conditions and restrictions as may be prescribed and, in the manner specified in Section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of Such person As per Section 17(2) of the CGST Act 2017; where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies and partly for effecting exempt supplies, the amount of credit shall be restricted to so much ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporate entities . As per Notification No; 22/2019-Central Tax (Rate) dated 30.09.2019, a Body Corporate is liable to remit GST on Reverse Charge basis for services provided by way of renting of a motor vehicle provided to a body corporate by any person other than, a body corporate, paying central tax at the rate of 2.5% on renting of motor vehicles with input tax credit only of input service in the same line of business. The applicant is availing Rent-a-Cab Services from many persons, where most of the service providers are unregistered and not paying GST at the rate of 5%. Presently they are remitting GST on the Reverse Charge mechanism for all the payments made on account of Rent-a-Cab Services, irrespective of whether the service provider is registered or not. 4.9. Regarding the time of supply of Deposit Works, the applicant submits that in the case of Deposit Works involving huge gestation period, the time span of works is on the higher side and it is not possible to raise the invoice at the time of collection of deposit as the status/completion of the work cannot be determined precisely in advance considering the divergent nature of the work. Further, there is every chance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aised various questions in the application. Before proceeding to answer the questions Raised by the applicant it is necessary to examine the scope of the powers of the Advance Ruling Authority in answering the questions raised before it and the admissibility of the questions raised before the Authority. Section 95(a) of CGST Act defines -advance ruling' as follows: - (a) advance ruling means a decision provided by the Authority or the Appellate Authority or the National Appellate Authority to an applicant on matters or on questions specified in sub-Section (2) of Section 97 or sub-section (1) of Section 100 or of Section 101C, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. 7.3. From the above definition it is evident that an applicant can seek an advance ruling in relation to supply of goods or services or both undertaken or proposed to be undertaken by them. Further, as per Section 103(1) of the CGST Act such an Advance Ruling is binding only on the applicant and on the officer concerned or the jurisdictional officer in respect of the applicant. 7.4. Section 97 of the CGST / SGST Act specifies the subjects ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant has sought the taxability of the services provided by the contractors to the applicant and hence the applicant is the recipient of the services. Therefore, the questions do not pertain to a transaction that is being undertaken or proposed to be undertaken by the applicant and hence do not fall within the purview of the definition of advance ruling. Further, it is categorically stated in Section 103 of the GGST Act that the ruling pronounced is binding only on the applicant and the jurisdictional authority of the applicant. Hence, if a recipient obtains a ruling on the taxability of his inward supply of goods or services or both the supplier of such goods or services and their jurisdictional authority is not bound by that ruling and the supplier and their jurisdictional authority is free to assess the supply according to their own. determination and the ruling has no relevance or applicability. Therefore, the above questions are not admissible. 7.8. The 3rd and 4th questions are regarding the eligibility of input tax credit on the tax paid on the supplies received by the applicant and are covered under clause (d) of sub-section (2} of Section 97 of the CGST Act and hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of Such person. (2) Notwithstanding anything contained in this section, no registered person Shall be entitled to the credit of any input tax. in respect of any supply of goods or services or both to him, unless,- (a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other taxpaying documents as may be prescribed; (aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit [note in the manner specified under section 37; (b) he has received the goods or services or both. Explanation .- For the purposes of this clause, it shall be deemed that the registered person has received the goods or, is the case may be, services ,- (i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n partially for the purpose of any business and partially for other purposes, the amount of credit shall be restricted to so much of the input tax as is attributable to the purposes of his business. Likewise, sub-section (2) of Section 17 provides that inhere the goods or services or both are used by the registered person partially for affecting taxable supplies including zero-rated supplies and partially for exempt supplies, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies. Sub-section (3) provides that the value of exempt supply shall be such as may be prescribed in cases covered by sub-section (2). Sub- section (4) of Section 17 provides for special provision for availment of ITC by banking companies. Sub-section (5) of Section 17 provides the negative list of goods and services in respect of which input tax credit is not available and sub-section (6) confers power on the Government to prescribe the manner in which the credit referred to in sub-sections (1) and (2) may be attributed. 7.13. Rule 42 and 43 of the Central Goods and Services Tax Rules, 2017, provides the manner of deter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate and does not issue an invoice charging central tax at the rate of 6 percent to the service recipient Anybody corporate located in the taxable territory Explanation , - For the purpose of this notification, - (b) Body Corporate has the same meaning as assigned to it in clause (11) of Section 2 of the Companies Act, ,2013. As per clause (11) of Section 2 of the Companies Act; 2013; Body corporate or Corporation includes a company incorporated outside India, but does not include,- (i) co-operative society registered underbuy law relating to co-operative societies; and (ii) any other body corporate (not being a company as defined in this Act), which the Central Government may, by notification, specify in this behalf 7.18 It is an admitted fact that the applicant is a body corporate as defined in clause (11) of Section 2 of the Companies Act, 2013. Since the Notification No, 13/2017 CT (Rate) dated 28.06.2017 as amended is issued under sub-section (3) of Section 9 of the CGST Act, 2017 the applicant is liable to pay GST as the recipient of services in respect of the services of renting of any motor vehicle designed to carry passengers deceived from any person other than a body corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case may be, the payment; (ii) the date of receipt of payment shall be the date on which the payment is entered in the books of account of the supplier or the date on which the payment is credited to his bank account whichever is earlier. SECTION 31. Tax invoice- (2) A registered person supplying taxable services shall, before or after the provision of service but within a presented period, issue a tax invoice, showing the description, value, tax charged thereon and such other 'particulars as may be prescribed: Provided that the Government may, on the recommendations of the 'Council, by notification, - (a) specify the categories of services of supplies in respect of which a fax invoice shall be issued, within such time and in such manner as may be prescribed; (b) subject to the condition mentioned therein, specify the categories of 'services in respect of which - (i) any other document issued in relation to the supply shall be deemed Jo be a tax invoice; or (ii) tax invoice may not be issued. (3) Notwithstanding anything contained, in sub-sections (1) and (2) ,- (a) a registered person may, within one month from the date of issuance of certificate of registration and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of service: Provided that where the supplier of Services is an insurer or a banking company or a financial institution, including a non-banking financial company, the period within which the invoice or any document in lieu thereof is to be issued shall be forty-five days from the date of the supply of service: Provided further that an insurer or a banking company or a financial institution, including a non-banking financial company, or a telecom. operator, or any other class of supplier of services as may be notified by the Government on the recommendations of the Council, making taxable supplies of services between distinct persons as specified in section 25, may issue the invoice before or at the time such supplier records the same in his books of account or before the expiry of the quarter during which the supply was made. 7.22. Therefore, in terms of provisions of sub-section (2) of Section 31 of the CGST Act, 2017 read with Rule 47 of the CGST Rules, 2017 the applicant shall issue tax invoice in respect of the supply of services namely; Deposit Works within 30 days from the date of supply of the service. However, as the applicant is collecting the consideration as per the esti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r contractor. Whether KSEBL can avail of Input Tax Credit on GST paid on materials and on labour contract? c) KSEBL is collecting GST on Work Deposits from the consumers and remits the same. KSEBL has utilized the materials from the pool of materials in stock which is centrally procured earlier paying GST. Only labour is outsourced. GST is paid on materials at the time of purchase and to the labour contractor. Whether KSEBL can avail of Input Tax Credit on GST paid on materials and on labour contracts? Ruling : For a, b, and c, the applicant is eligible for availing credit of tax paid on the inward supply of inputs, input services and capital goods used or intended to be used for the purpose of the outward supply of services, namely; Deposit Works, subject to the conditions and restrictions prescribed in Sections 16 and 17 of the CGST Act, 2017 read with Rules 42 and 43 of the CGST Rules, 2017. Question 4: If direct credit cannot be availed by KSEBL, whether proportionate credit can be availed by KSEBL for the quantum of taxable services provided based on the data available in GSTR-2A of KSEBL? Ruling : Not relevant in view of the answer to Question No. 3 above. Question 5: Whether ..... X X X X Extracts X X X X X X X X Extracts X X X X
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