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2023 (10) TMI 814 - AT - Service TaxPoint of taxation Rules - Liability to pay interest on the delayed remittance of Service Tax on the advances received for the period April 2009 to September 2013. It is submitted that mobilisation advances should have been paid from the due date of the advances received instead of paying at the time of completion of the project. HELD THAT:- The demand of interest is for two projects undertaken by the appellant. One of them is BHEL and from the work order of this unit at Clause 12.1 mobilisation advance is shown as interest-bearing mobilisation advance of 5% of the contract price in stages is admissible in the following manner. Rate of interest shall be 2% above PLR of State Bank of India applicable at the time of drawing the advance - Records are produced to show that these mobilisation advances are shown as liabilities in their financial records. Therefore, the question of paying Service Tax at the time of receipt of these advances does not arise since they are only to be taken as loans and it became part of the consideration as and when the invoices were raised. The question here was whether the unadjusted amount received as mobilization advance during the Service Tax regime was liable to GST after the introduction of GST - In the present case, the liability of tax on mobilization advance is not in dispute, the only dispute is the time of payment of tax. Even as per “The Point of Taxation Rules”, the liability to pay taxes in the projects undertaken by the appellant arises as per clause b (i) in case of continuous supply of service where the provision of the whole or part of the service is determined periodically on the completion of an event in terms of a contract, which requires the receiver of service to make any payment to service provider, the date of completion of each such event as specified in the contract shall be deemed to be the date of completion of provision of service. In the instant case, the appellant has paid the tax on completion of the service on the invoice value which includes the mobilisation advances received by him. It is not the case of the department that invoices were raised in piecemeal without payment of tax as and when the advances were received - there are no merit in demanding interest assuming that the date of payment of tax arose based on the advances received. The impugned order is set aside - appeal allowed.
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