TMI Blog2021 (2) TMI 930X X X X Extracts X X X X X X X X Extracts X X X X ..... (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 Mobilisation Advance has been paid to the appellant by his service receiver against the bank guarantee executed by the appellant for the entire amount. This shows that the amount received by the appellant is consideration towards the supply to be made. It is also to be noted that the appellant holds the amount received as advance and considers as payment towards supply only when he raises the RA bills against the supplies made by him to the receiver, i.e., his client. Further, the transition provision 142 (11) (b) considering such scenario provides for payment of GST on the consideration which has not suffered service tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no rectification which has the effect of enhancing the tax liability or reducing the amount of admissible input tax credit shall be made, unless the appellant has been given an opportunity of being heard. 2. Under Section 103(1) of the 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is raised in that particular month. As on 30th June 2017 they had paid five installments of first tranche and three installments of second tranche of Mobilization Advance totally amounting to ₹ 4,22,32,533/-. With the implementation of GST from 01.07.2017, the payment of remaining ten installments of first tranche and the remaining twelve installments of second tranche of the Mobilization Advance totally amounting to ₹ 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 ₹ 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 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayer who has paid either VAT or Service Tax under pre-GST regime would be allowed to take credit of such paid amount of VAT or Service Tax. However, TNAAR held that Section 142 (11)(c) is applicable only in those cases where both VAT and Service Tax has been paid by the taxpayer. Thus, the same is not applicable in their case, where only Service 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 Po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advance. Therefore, no GST is payable under the regime is flawed. Under the Service Tax provisions, the levy was on service provided or to be provided and Point of Taxation was the issuance of invoice or receipt of payment whichever is earlier. Therefore, when the mobilization advance invoice was issued, the point of taxation had occurred. Accordingly, 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 reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estions are answered together in a complete manner. Thus they seek for complete clarification in respect of the taxability of mobilization advance received by them in both pre-GST and GST regime and on the issue whether SPCPL would be eligible to avail ITC which was transferred from Pre-GST period through TRAN-I Return filed in terms of the Section 142 (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 21 st 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 the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Service Tax paid to the Service Receiver. On Transition, the appellant had availed credit of Service Tax paid on the Mobilization Advance (which had been passed on to CMC) in TRAN-1 in terms of the Section 142(11)(c) of the GST Act. The appellant had sought confirmation of applicability of transitional Provision under Section 142(11) (c) of the Act and their liability to pay GST 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its language. Holding the said principle, the applicability of the above provisions on the Mobilization Advance transitioned into GST is examined. 9.1 On the applicability of GST on the Mobilization Advance which is transitioned to GST, the lower authority has ruled that the transition provision applicable to the case at hand is as per Section 142(11)(b) of the act and Mobilisation advance to 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) rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant provides Works Contract Service which is defined as Service under GST Law as per Schedule-Il of the Act. The appellant has received Mobilisation Advance in the Pre-GST regime and the supplies against the said advance is made in the GST Regime and therefore the transition provision applicable to Services are to be applied to the case at hand, i.e, Section 142 (11) (b) of the Act is applicable in the case at hand. 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 . S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised by the appellant is on their eligibility to credit based on the transitional provisions which has not been answered by the Lower Authority as not falling under the purview of this authority. They have claimed that the outcome of advance ruling will be of no consequence unless all the questions are answered together in complete manner and has sought clarification in respect of the taxability of mobilization advance received by them in 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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