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2018 (8) TMI 771 - AAR - GSTSupply of goods or services - continuous supply of services or not? - time of supply - Contract Management System (CMS) - The Applicant is very clear in stating that the procedure undertaken under the proposed CMS will not involve transfer of title to the refractories used in course of the production process. Use of the refractories delivered to the customer, including application and disposal, will continue to be controlled by the Applicant. Held that:- It is clear from the description of the activities proposed to be undertaken that the Applicant supplies service associated with the manufacturing of metal, value of which is measured at an agreed rate per tonne of hot metal produced and that the Applicant manufactures refractories, which are used as inputs as defined under Section 2(59) of the GST Act. Provisioning of the service involves, inter alia, round-the-clock monitoring of the production process during the entire contract period, and continuous evaluation of the requirement of refractories, quality control, replacement and disposal of used refractories etc. Invoices are to be raised on monthly basis at an agreed rate per tonne of the hot metal manufactured during the period - It is, therefore, continuous supply of service within the meaning of Section 2(33) of the GST Act, provided the service is agreed to be provisioned for a period exceeding three months. Time of supply - Held that:- Provisioning of the service is measured on monthly basis, and the date of payment is within thirty days from end of the month. The tax invoice shall, therefore, be issued in terms of Section 31(5)(b) on or before the supplier receives the payment, and the time of supply shall be the date of issue of invoice in terms of Section13(2)(a) read with Section 31(2) of the GST Act and Rule 47 of the GST Rules. Ruling:- Activities the Applicant proposes to undertake are services associated with manufacturing of metal, and may be termed as “continuous supply of service” within the meaning of Section 2(33) of the GST Act, provided the service is agreed to be provisioned for a period exceeding three months. The time of supply shall be the date of issue of invoice in terms of Section 13(2) (a), read with Section 31(2) of the GST Act and Rule 47 of the GST Rules.
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