TMI Blog2019 (9) TMI 877X X X X Extracts X X X X X X X X Extracts X X X X ..... ply and not included in the price actually paid or payable for the goods or services or both shall be included in the value of taxable supply. The amount certified by the architect for the invoice to be issued before deducting the value of Cement, Mild Steel, Tor Steel and Structural Steel shall be the value of supply for the purpose of Levy of tax as per section 15 of the Act. - GST-ARA-03/2019-20/B-90 - - - Dated:- 20-8-2019 - SHRI B. TIMOTHY, AND SHRI B.V. BORHADE, MEMBER PROCEEDINGS (Under Section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) The Present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as the CGST Act and MGST Act ] by M/s. TEJAS CONSTRUCTIONS INFRASTRUCTURE PRIVATE LIMITED, the applicant, seeking an advance ruling in respect of the following questions. 1. Whether the contractor can charge GST on the value of material supplied by the recipient of service? 2. What should be the mechanism to calculate the taxable value as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Later, the value of Cement, Mild Steel, Tor Steel and Structural Steel provided by the contractee are deducted. (Certificate copies are attached herewith for your reference under Annexure 4) 3A. Relevant Provision of GST Law: Section 15 of CGST Act, 2017: Value of taxable supply. (1) The value of a supply of goods or services 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 the recipient of the supply are not related and the price is the sole consideration for the supply. (2) The value of supply shall include -- (a) any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than this Act, the SGST Act; the UTGST Act and the GST (Compensation to States) Act, if charged separately by the supplier; (b) any amount that the supplier is liable to pav in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both: (c) incidental expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017 4. Also as per Circular. 47/21/2018-GST, if the value of moulds and dies provided by the OEM to the component manufacturer on FOC basis shall not be added to the value of such supply because the cost of moulds/dies was not to be incurred by the component manufacturer and thus, does not merit inclusion in the value of supply in terms of section of the Central Goods and Services Tax Act, 2017. Under works contract service it's the contractor cost to include the steel, cement and other material. These are essential components for supply of works contract service. If the steel cement and other material were not supplied by the contractee , still they would have been procured by the contractor and would have been part of contract value. Hence, supply from contractee or not will not affect the value of taxable supply under Section 15 of CGST Act, 2017. 3. CONTENTION AS PER THE CONCERNED OFFICER The submission, as reproduced verbatim, could be seen thus- The application has been examined and the submission/comments are as under: Clarification asked for by M/s. Tejas Contruction and Infrastructure Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ictional Officer Ms. Sumangla Sharma, Asstt. Commr. Of COST, Division-I, Pune-II appeared and made written submissions. The application was admitted and called for final hearing on 02.08.2019, Sh. Pranav Mehta, C.A. appeared made oral and written submissions. Jurisdictional Officer Sh. B. P. Singh, Suptt. appeared and made oral submissions. 05. OBSERVATIONS We have gone through the facts of the case, documents on record and submissions made by the, the applicant as well as the jurisdictional office. Applicant is providing construction service to Shri Gajanan Sahakari Soot Girni Maryadit (contractee), and consideration for the same will be paid to applicant subject to said conditions executed completion of work shown as per the drawings, specifications priced schedule of quantities. As per the agreement and Work Order, Cement, Mild Steel, Tor Steel and Structural Steel required for the work will be supplied by the contractee as per the rate decided. The applicant has submitted that the value of contract as per agreement is ₹ 600 lakhs which is inclusive of material and labour. They will be paid GST on the entire value of the contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per agreement, which is inclusive of material and labour. Further we find that, the certificate issued by the Architect (i.e. RA Bill) for the invoice to be issued contains total contract value and from that, the value of Cement, Mild Steel, Tor Steel and Structural Steel provided by the contractee is deducted. From the terms of the contract as submitted in this proceedings, we draw a conclusion that the supply by the contractee to the applicant is not a free supply. To arrive at this conclusion, we may draw support from the decision of Supreme Court of India in case of M/s, N.M. Goel Co vs Sales Tax Officer, Rajnandgaon ... on 28 October, 1988 Equivalent citations: 1989 AIR 285, 1988 SCR supl. (3) 657 = 1988 (10) TMI 106 - SUPREME COURT . The facts of the case in brief were as follows: The appellant-company, a building contractor and registered as a dealer under the Madhya Pradesh General Sales Tax Act, entered into a Works Contract with the P.W.D. for construction of food grains godown and ancillary buildings. It was on item rate basis. In the tender submitted by the appellant, the prices of the materials to be used for construction including cost of iron, steel and ceme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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