Summary of case:
The applicant has executed the agreement in 2015-16 for construction of a bridge and approach road under the name “Construction of bridge across Kumaradhara river on Kudmar Shanthimogaru- Sharavoor-Alankar Road at 1.20 KM in Shanthimogaru of Puttur Taluk, Dakshina Kannada District with an estimated amount of Rs.940 lakhs. Further, the value was revised to Rs. 15,05,00,346-00 and the payments were made worth Rs. 1,48,26,658-00 by the PWD Division, Mangalore
The applicant has sought advance ruling in respect of the following questions:-
1. Whether the applicant is liable to collect and pay GST on amount received from the PWD department as per revised estimate in respect of work namely “Construction of bridge across Kumaradhara river on Kudmar Shanthimogru Sharavoor Alankar Road at KM 1.20 in Shanthimogaru of Puttur taluk?
2. Whether the applicant is liable to collect and pay GST on amount received from the Executive Engineer, Public Works, Inland Water Transport Department, Mangalore Division?
3.Whether the PWD department is liable to pay GST under the GST Act or VAT Tax under Karnataka Value Added Tax Act?
Section 142 (2)(a) of the GST Act is as follows:-
“Where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or services or both is revised upwards on or after the appointed day, the registered person who has removed or provided such goods or services or both shall issue to the recipient a supplementary invoice or debit note, containing such particulars as may be prescribed, within thirty days of such price revision and for the purposes of this Act such supplementary invoice or debit note shall be deemed to have been issued in respect of an outward supply made under this Act;”
In the given case the applicant has issued invoices for the such transactions after the appointed date. Such invoices should be deemed to have been issued in respect of an “outward supply made under the GST Act”. Hence the turnovers on which the question is raised by the applicant are deemed to be the turnovers under the GST Act and not under the VAT Act and such turnover are liable to tax at the appropriate rates under the GST Act. There is no question of the same being taxed under the earlier KVAT Act.
Hence, the applicant is liable to charge GST on the said amount and is entitled to collect the same from the recipient of the service. The TDS amount deducted by the Department could be utilised by the applicant while making the payment of the liability but that does not preclude him from paying the tax.
For the time of supply, it is clear that Section 142(2)(a) of the CGST Act requires the applicant to issue a tax invoice within 30 days from the date of price revision and if the tax invoice is issued within the stipulated time limit, then the date of issue of invoice would be the time of supply for the additional price revision and in case the tax invoice is not issued within the stipulated time, then the time of supply would be the date of price revision. In case where the payment is received earlier to these dates, then the date of receipt of payment would be the time of supply as per Section 13 of the CGST Act.
CRUX: 1. The applicant is liable to collect and pay GST at the rate of 12 % (CGST @ 6% and KGST @ 6%) as per Section 142(2) (a) of the GST Act on the amount received from the Public Works Department as per revised estimate in respect of work namely “Construction of bridge across Kumaradhara river on Kudmar Shanthimogru Sharavoor Alankar Road at KM 1.20 in Shanthimogaru of Puttur taluk, subject to the condition that the amount is related to price revision of the contract entered prior to the appointed date.
2. Yes, the applicant is liable to collect and pay goods and services tax on amount received from the Executive Engineer, Public Works, Inland Water Transport Department, Mangalore Division.