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TMI Blog2024 (8) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... nd when the petitioner either raises invoice for payment of the amount in 30 Annuities qua balance 60% or receives amounts in Annuities, the petitioner would be liable to pay tax. Merely because, the petitioner has sub-contracted the work and completed the work in advance for receiving the payments in the form of Annuity over a period of 15 years would not either disentitle the petitioner to avail input tax credit on the tax charged by the sub-contractor on the petitioner or to draw an inference that the petitioner was indeed liable to pay tax on the entire value of the contract with NHAI, even though the petitioner has neither raised any invoice nor received the payment. The impugned orders are set aside and the cases are remitted back to the respondent to re-examine the issue in the light of the above observations and in the light of Circular No.221/15/2024-GST, dated 26.06.2024. Petition disposed off by way of remand. - Hon'ble Mr. Justice C. Saravanan For the Petitioner in all the W.Ps. : Mr.G.Natarajan For the Respondent in all the W.Ps. : Mr.J.K.Jeyaselan Government Advocate COMMON ORDER By this common order, all these Writ Petitions are being disposed of. 2 . In these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt terms are so staggered that the concessionaire is held accountable for the repair and maintenance of the highway as well. The contract needs to be looked at holistically based on the services to be performed by the concessionaire and cannot be artificially split into two separate contracts for construction and operation and maintenance, based on the payment terms. The concessionaire is bound contractually to complete not only the construction of the highway but also to operate and maintain the same. 2.2 In HAM contract, the payment is made spread over the contract period in installments and payment for each installment is to be made after specified periods, or on completion of an event, as specified in the contract. The same appears to be covered under the Continuous supply of services as defined under section 2(33) of the CGST Act. 2.3 As per clause (a) of Section 13(2) of CGST Act, the time of supply in respect of a supply of services shall be the date of issue of Invoice, or date of receipt of payment, whichever is earlier, in cases where invoice is issued within the period prescribed under section 31 of CGST Act. Further, as per clause (b) of Section 13(2) of CGST Act, in ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of payment of tax on the said annuity/installment in view of the provisions of section 15(2)(d) of the CGST Act.'' 6 . The above Circular was issued by the Central Board of Indirect Taxes and Customs pursuant to the decision taken by the GST Council in its 53rd Meeting on 22.06.2024. The petitioner's contract with its employer namely, the National Highways Authority of India under the Concession Agreement of April, 2018 contemplates payment of 40% of the Bid Cost in five installments. Clause 23.3.1 reads as under:- '' 23.3 Payment of Bid Project Cost 23.3.1 40% (forty per cent) of the Bid Project Cost, adjusted for the Price Index Multiple, shall be due and payable to the Concessionaire in 5 (five) equal installments of 8% (eight per cent) each during the Construction Period in accordance with the provisions of Clause 23.4.'' 7 . Thus, during the construction period, the payment of 40% of the Bid Cost is staggered in five installments in Clause 23.4 as detailed below:- '' 23.4 Payment during Construction Period For the purpose of this Clause 23.4, the Payment Milestone for the Milestone for release of payment during Construction Perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased on the work completed in the Profit and Loss Account is concerned, it is submitted that it is in accordance with the accounting standards of the Institute of Chartered Account of India and therefore, merely, because 60% of the amount to be received in 30 Annuities has been shown as exempted in the returns would not amount that the petitioner has evaded tax. It is submitted that as and when the petitioner will raise invoice based on the milestones for the 30 Annuities as per Clause 23.6.3, tax will be paid by the petitioner. 13 . On the other hand, the learned Government Advocate for the respondent would draw attention to Paragraphs 6 and 9 of the counter affidavit, which read as under:- ''6. It is respectfully submitted that the Assessing Officer, after verifying the records/documents produced/furnished, GSTR 1, GSTR 3B returns filed by them and GSTR 2A auto populated in respect of their concern, found out that the assesses have not correctly reported the taxable turnover of works contract receipts up to 40% of the completed works for which the sub-contractor have issued completion bill for a value of Rs. 664,62,77,344/- up to January 2022 i..e for 89% of the works con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance on 15.2.23. The assesses even then have not filed documentary evidence to prove the claim of exemption. The Assessing Officer have therefore held that the claim of wrong exemption established the suppression of taxable turnover on non-declaration of facts and willful misstatement of facts as defined under Sec.74 of the TNGST and CGST Acts 2017. The Assesses have not paid the tax with interest and penalty equal to twenty five percent of tax within thirty days of issue of show cause notice. The Assessing Officer have therefore passed orders disallowing the claim of exemption on a turnover of Rs. 2983755027/- with interest at 18% under Sec.50(1) of the Acts and levy of penalty under Sec.74(9) of the Acts.'' 14 . Having considered the submissions made by the learned counsel for the petitioner and the learned Government Advocate for the respondent, I am of the view that the impugned orders are to be set aside and the cases are remitted back to the respondent to re-examine the issue in the light of the clarification issued by the Central Board of Indirect Taxes and Customs vide Circular No.221/15/2024-GST, dated 26.06.2024, pursuant to the recommendation of the GST Council i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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