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2019 (12) TMI 1462 - AAR - GSTDetermination of Time of Supply - 'Deposit Works' being executed by the applicant - time of receipt of funds from the client government department or the time when expenditure incurred towards execution of the work is debited to 'Deposit Works account'? - value of such supply. HELD THAT:- The amount received by the applicant is for certain supply of service, to be carried out by them. Further, as and when some part of the work gets completed, the proportionate amount gets debited from advance amount. Accordingly, it is observed that the contention of the applicant that the amount received by them as “Deposit Work” is a deposit and not advance, is not tenable. The amount received by them is rightly classifiable under advance received for supply of service. As regard to the proviso to sub section 31 of Section 2 of CGST Act 2017 i.e. “Provided that a deposit given in respect of supply of goods or service or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply”, it is observed that the above said provision envisages a situation wherein the amount is received by the service provider as “Security deposit” for any particular work and the same get refunded after the completion of said work. Whereas, in the instant case, the amount received by the applicant is in the nature of “Advance payment” and not “Security deposit”. Thus the proviso in question does not apply in the instant case. Time of supply of service - Section 13 of the CGST Act, 2017 - HELD THAT:- The time of supply is determined with reference to the time when the supplier receives payment with respect to the supply as well as a few other references like issue of invoice, receipt of goods etc. In general, the time of supply is earliest of issuance of invoice or receipt of payment. Therefore, in case of advance received for any supply, time of supply is fixed at the point when advance is received, irrespective of the fact whether the supply is made or not. Accordingly, GST needs to be paid with reference to the time at which advance is received. In view of this we observe that the time of supply in case of 'Deposit Works' being executed by the applicant would be the time of receipt of funds from the client (Government department). Value of supply - Section 15 of the CGST Act 2017 - HELD THAT:- The value of the supply, on the advance payment received by the applicant, will be the amount of advance received by the applicant towards that particular work/ supply.
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