9911796707
TMI Blog2021 (2) TMI 930X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, this Advance ruling pronounced by the Appellate Authority under Chapter XVII of the Act shall be binding only (a). On the applicant who had sought it in respect of any matter referred to in sub-section (2) of Section 97 for advance ruling; (b). On the concerned officer or the jurisdictional officer in respect of the applicant. 3. Under Section 103 (2) of the Act, this advance ruling shall be binding unless the law, facts or circumstances supporting the said advance ruling have changed. 4. Under Section 104(1) of the Act, where the Appellate Authority finds that advance ruling pronounced by it under sub-section (1) of Section 101 has been obtained by the appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void sb-initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the appellant as if such advance ruling has never been made. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first tranche and the remaining twelve installments of second tranche of the 'Mobilization Advance' totally amounting to Rs. 11,61,39,467/- transitioned into the GST regime. They had filed TRAN-1 Return in terms of the Section 142(11)(c), under Transitional Provisions (Chapter XX) of both CGST Act, 2017 and TNGST Act, 2017 for transferring the amount of Rs. 1,44,85,057 being Service Tax paid on the 'Mobilization Advance' under Sec.66B read with Sec.67 of the Finance Act, 1994 during the Pre-GST regime. During September 2017, this amount has been transferred into GST common portal and credited into their Electronic Credit Register. It is the view of the appellant that the portion of 'Mobilisation advance' transited into GST regime would get covered under Section 142(11)(c) of CGST Act/TNGST Act 2017. Their client Christian Medical College, Tamil Nadu, India (herein after CMC) has disputed this and they are of the opinion that the portion of the Mobility Advance transited into GST regime would get covered under Section 142(11)(b) of the TNGST Act, 2017/CGST Act, 2017 as Service tax was leviable on 'Mobilization Advance' paid for Works Contract, under Chapter V of the Finance Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice tax has been paid by them. * Under Pre-GST regime, the Time of Supply of Service varied as per the Service Tax Provisions, i.e. it could be either at the time of issuance of invoice or receipt of payment, whichever is earlier. Accordingly, the time of supply was not dependent only on the actual provision of service. However, the levy of VAT arose only when the sale was completed. Thus, in a case, where Service Tax and VAT were payable and both had been duly paid, the activity of provision of service and sale of goods was already completed. In such scenario, neither the point of taxation nor the time of supply falls within the GST regime. Accordingly, the question of availing the credit of either Service Tax or VAT do not arise and Section 142 (11)(c) will have no consequence. * Section 142 (11)(c) can only be involved if either the Point of Taxation or Time of Supply for the payment of Service Tax or VAT has not arisen in Pre-GST regime. Therefore, the reasoning given by TNAAR with respect to Section 142 (11)(c) does not hold good as it would mean that even if Service Tax and VAT had already been paid, still credit would be available under GST regime. It is to be deemed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly, the liability to pay Service Tax was duly discharged. However, due to the introduction of GST, the service of Works Contract which were "to be provided" under Pre-GST regime, could not be provided by SPCPL to CMC as the levy on such service did not fructify. Since the service/ supply were completed under the GST regime, the same was subject to GST as per Section 13 of the CGST Act. Thereby, in order to provide charging provision to said supply which would be fructified under GST regime, the credit of tax paid in earlier regime was provided by Section 142 (11)(c) to avoid double taxation. Basis the afore mentioned, in the instant case, they were required to discharge the GST liability at the time of issuance of invoice or receipt of payment whichever is earlier. Further, no VAT was paid on unadjusted amount of advance in Pre-GST regime, thus, the same would be considered as "consideration" in respect of a supply to be made under GST regime. Thereby, the Appellant was required to discharge GST on the amount of advance which remains unadjusted as on 01.07.2017 in the books of accounts. The decision of West Bengal Advance Ruling Authority("WBAAR") in the case of M/s. Siemens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (11)(c) of the Act. PERSONAL HEARING: 5.1 Due to the prevailing PANDEMIC situation, the appellant was addressed through the Email Address mentioned in the application to seek their willingness to participate in a virtual Personal Hearing in Digital mode vide e-mail dated 17th July 2020. The appellant provided their consent to be heard through virtual mode. Accordingly, the hearing was held virtually on 21st August 2020. Ms. Kanupriya Bhargava, Ms. Divya Bhardwaj, Legal Counsel and Shri Vinod Lalwani, G.M. Taxation participated in the hearing before the authority. Their contention is the Works Contract service provided by them was leviable to VAT and Service Tax in the Pre- GST Regime. The works continue in the GST Regime and therefore the Transitional Provisions at Section 142(11)(c) of the GST Act is applicable to their case and not Section 142 (11) (b) as held by the lower authority. They also wanted ruling on their eligibility to the credit of Service Tax paid by them and transitioned to GST regime, which was not answered by the lower authority for the reason that the same is not in the purview of the Authority. They undertook to furnish the documents shared during the hearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T on the transitioned 'Mobilization Advance'. The Lower Authority in Para 7.3 & 7.4 of the ruling has observed 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 does not apply to the case at hand. Accordingly, we hold that the transitional provisions under Section 142(11) (c) is not applicable to the case of the applicant. 7.4 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the extent received prior to the implementation of GST towards supply of Works Contract Service is not to be subjected to GST as per the provisions of Section 142(11)(b) of the GST Act 2017'. We find that the appellant seeks a clarification before us as to whether they are liable to pay GST on that portion of the 'transitioned Mobilization advance' on which Service Tax was not leviable/payable under the existing law or there is no GST liability on the entire 'Mobilization advance' received by them prior to the implementation of GST. Thus, we find that the issue to be decided is whether GST is payable on that portion of Mobilization advance transitioned into GST and on which no tax has been paid in the Pre-GST regime 9.2. Opinion of SGST Appellate Member: Section 142(11)(b) reads as follows: (b) notwithstanding anything contained in section 13, no tax shall be payable on services under this Act to the extent the tax was leviable on the said services under Chapter V of the Finance Act, 1994(32 of 1994) The use of non-obstante clause cannot be taken to mean that section 13 does not apply for a given supply of service where service tax is also leviable. It would have to be taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd. While I agree with the view of the learned SGST Member that "The use of non obstante clause cannot be taken to mean that section 13 does not apply for a given supply of service where service tax is also leviable. It would have to be taken to mean that for a given supply of service (including works contract), if GST is leviable under the Act by application of section 13, then the levy of tax so determined will have to be reduced by the Service Tax payable on the same supply of service." I do not agree that Section 13 of the Act is to be applied first to determine the levy of GST in a supply of service. Levy of GST is as per Section 9 of the Act and Section 13 provides the 'Time of Supply' in respect of such supply, i.e, the time of payment of the tax. Section 13 of the Act provides that the tax is payable on receipt of the consideration when the same precede the supply or issuance of Invoice in respect of Service. The conclusion of the SGST Member above, that the time of supply in respect of the entire Mobilization Advance falls in the Pre- GST Era and therefore, GST is not payable on that portion of the Advance, which has not suffered Service Tax or VAT is not agreeable. 'Mobi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both Pre-GST and GST regime and their eligibility to credit based on the transitional provisions. Advance Ruling is a mechanism to bring down unwanted litigations and a measure of ease of doing business but the scope of the mechanism is spelt under Section 97(2) of the Act. The Authority is to rule only on the issues spelt in Section 97 (2) of the Act and only to those who are eligible to seek such ruling under Section 95 of the Act. The lower authority in Para 6 of the ruling, has considered all the three questions raised and found that the question relating to eligibility to credit under transitional provisions is not in the ambit of this authority, to which we do not see any reason to disagree. This authority can rule only on the questions within the scope of the authority. While we understand the appellant's grievance of not answering all the questions raised by them in complete manner, we re-iterate that Advance Ruling Authority has their limits defined and could act only within its authority. 11. To Summarize, We hold that 1. With regard to the Mobilization Advance transitioned into GST on which no Service Tax is paid as per Chapter V of Finance Act 1994, the issue is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
