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2020 (3) TMI 295 - AAR - GSTLevy of GST on Mobilization Advance received before GST era - Applicability of Transitional Provisions under Section 142(11)(c), (Chapter XX) of TNGST Act, 2017/CGST Act, 2017 - remaining installments of “Mobilization Advance’, which transitioned into the GST regime - adjustment of the same post GST regime - Levy of GST - input tax credit on Service Tax paid which was transferred from Pre-GST period through TRAN-1 Return filed in terms of the section 142(11)(c), under Transitional Provisions (Chapter XX) of both TNGST Act, 2017/CGST Act, 2017. HELD THAT:- The applicant has received the advance against the service to be provided and as per the explanation above, the supply is deemed to have been made to the extent it is covered by the invoice or of the payment and the ‘date of payment’ is the date on which it is entered into the books of account of the supplier, i.e, the applicant. In the case at hand the applicant has raised the invoice to the full Mobilisation Advance received by them and is, therefore, deemed to have supplied works contract service to CMC prior to 1-7-2017 to the extent covered by the Mobilisation advance that stood credited to its account as per Section 13 of the GST Act. Whether GST is to be paid on the amount raised in the RA Bill periodically post implementation of GST, without deducting the part of mobilisation advance adjusted in the bills raised or the liability to GST is to be arrived at after deducting the part of Mobilisation advance being adjusted in the RA bill. The applicant has stated that their case is covered under the provisions of Section 142(11)(c) and accordingly, the liability to GST arises inclusive of that part of advance sought to be adjusted against the receivables in a particular RA Bill. It can be deduced that Section 142(11) (c) is applicable in cases with respect to transactions in which both VAT and Service Tax are paid in the Pre-GST regime and on which GST would be leviable to the extent ‘supply’ is made after the appointed date for the recipient who has actually paid the tax. In the case at hand, the applicant has paid Service Tax on the advance received as per the said statute for which the applicant has raised invoice on their service receiver along with the component of service tax but no VAT has been paid/received from their customer on that part of the Mobilisation Advance pertaining to materials and therefore, this provision do not apply to the case at hand - the transitional provisions under Section 142(11)(c) is not applicable to the case of the applicant. Further ‘Supply of Works Contract’ is deemed to be a service under GST. Under the pre-GST regime, service tax was leviable on the service portion of the Works Contract, which in the case at hand being original work, was levied on 40% of the value. The applicant on receipt of advance has paid the service tax on the 40% of the value as required under the provisions of Service Tax - GST is not payable on the Mobilisation advance which has been received prior to GST implementation as per Section 142(11)(b) of the Act. Eligibility of ITC as per Section 142(11)(c) - HELD THAT:- Section 142(11)(c ) will not be applicable on the Mobilisation Advance. However, the admissibility of transitional credit is not in the ambit of Advance Ruling and therefore not considered.
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