GST Liability on Interest Free Mobilisation Advance Cannot Be Deferred Until Adjustment in Running Bills: AAR Gujarat

In re P C Snehal Construction Private Limited (GST AAR Gujarat) The Authority for Advance Ruling (AAR), Gujarat, examined whether GST is payable on a mobilisation advance received under a works contract and determined the time at which tax liability arises. The applicant, a GST-registered government contractor, was awarded a contract by Ahmedabad Urban Development Authority (AUDA) for construction and five years of operation and maintenance of a storm water drainage system. Under the tender terms, 10% of the contract value was paid as an interest-free mobilisation advance, backed by a guarante...