Actual Transaction value includes escalated value for GST payment

In re B P Sangle Constructions Pvt. Ltd. (GST AAR Maharashtra)

Escalated value received under service contract to be considered for the payment of GST

The AAR, Maharashtra in the matter of B P Sangle Constructions Pvt. Ltd. [Advance Ruling No. GST-ARA-44/2020-21/B-41 dated March 31, 2022] held that, escalated value received under a contract for service of construction of road during the Goods and Services Tax (GST) regime, shall be added to the original contract value and the actual transaction value should be considered for payment of tax.

Facts:

M/s. B P Sangle Constructions Pvt. Ltd. (“the Applicant”) was awarded a contract by National Highways Authority of India (“NHAI”) for construction of road for an agreed consideration of INR 65,90,98,099/- which included VAT. However, during the course of completion of service as per the contract, there was an escalation in the contract value against goods and services took place due to the introduction of the GST regime w.e.f. July 01, 2017.

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