18% GST Payable on Liquidated Damages for delay In Power Project: AAR

Case Law Details

Case Name : In re M/s. Maharashtra State Power Generation Co. Ltd (AAR Maharashtra)

Appeal Number : NO. GST-ARA- 15/2017-18/B-30

Date of Judgement/Order : 08/05/2018

Related Assessment Year :

Courts : AAR Maharashtra Advance Rulings

Download Judgment/Order

In re M/s. Maharashtra State Power Generation Co. Ltd (AAR Maharashtra)

Question 1

Whether GST is applicable on Liquidated Damages in case of Operation & Maintenance activities and Construction of new power plants or renovation of old plants Or is applicable in both cases?

We have not been provided with separate agreements in respect of the situations posed above. The facts of each agreement and the attending circumstances would have to be seen to provide an answer. We can only answer in terms of the agreement between Maharashtra State Power Generation Company Limited (Owner) and Bharat Heavy Electricals Limited (Contractor) for Erection & Commissioning of Main Plant Package at Chandrapur T.P.S. Expansion Project 2 x 500 MW that has been provided for our perusal. In terms of the aforesaid agreement, GST would be applicable on the Liquidated Damages.

Question 2

GST is applicable, kindly clarify the following related aspects also Whether the GST on Liquidated Damages is covered under Schedule II entry No 5(2) (e) vide HSN code 9997-Other services rate 18% is correct or any other entry is relevant?

We would be constrained to restrict the answer to this question in terms of the agreement placed before us. We have observed above that the impugned levy of liquidated damages would be covered by clause (e) of para 5 of Schedule II appended to the GST Act.

To answer the question as regards the schedule entry and the tax rate applicable, we find that there is no specific schedule entry in the Notification no. 11/2017 – Central / State Tax (Rate) [as amended from time to time] for taxable services and the Notification no. 12/2017 – Central / State Tax (Rate) [as amended from time to time] for services exempt from GST. A reference to the Annexure about Scheme of Classification of Services as appended to the Notification no. 11/2017 – Central / State Tax (Rate) [as amended from time to time] reveals thus –

S. No.	Chapter, Section, Heading, Group	Service Code (Tariff)	Service Description
700	Heading 9997		Other services
716	Group 99979		Other miscellaneous services
720		999794	Agreeing to tolerate an act
722		999799	Other services nowhere else classified

In view of the above, following schedule entry under the Notification no. 11/2017 – Central / State Tax (Rate) [as amended from time to time] for taxable services would cover the impugned levy of liquidated damages –

SI. No.	Chapter, Section or Heading	Description of Service	Rate (per cent.) [CGST + MOST]
35	Heading 9997	Other services (washing, cleaning and dyeing services; beauty and physical well-being services; and other miscellaneous services including services nowhere else classified).	18% (9% + 9%)

b) Liquidated Damages is determined and imposed upon the contractor after in-depth study. In such case, what will be construed as the time of supply. Will it be the period in which delay is occurring or it is the time when decision to impose Liquidated Damages is taken?

We would be constrained to restrict the answer to this question in terms of only the agreement placed before us. The Agreement expressly provides that liability of payment of these liquidated damages by the Contractor will be established once the delay in successful completion of trial operation is established on the part of the Contractor. This would define the time of supply.

c) If some part of delay has occurred before GST roll-out and some part of delay has occurred after GST roll-out, whether GST will be applicable to the Liquidated Damages imposed for entire period of delay or to the period falling after GST roll-out? In case when GST is to be imposed for period after date of GST rollout but due to maximum capping of LD, the amount of LD is calculated at given percentage instead of being period-based, then how GST needs to be levied.

The question is based on some incorrect presumption owing to which the applicant seems to have adopted some method of deduction of liquidated damages from the payments to be made to the contractor. We are afraid that no such strategy of deducting or of capping can be inferred from the agreement clauses. We would be constrained to restrict the answer to this question in terms of only the agreement placed before us. Sub-section (1) of section 13 of the GST Act provides that the liability to pay tax on services shall arise at the time of supply. If the Contractor fails to achieve the Trial Operation of the unit within a specified time period which falls under the GST regime then levy of liquidated damages would be attracted and this levy would attract the GST levy. In view thereof, as discussed in the answer to the Q.2(b), the agreement clauses would have to be referred to. Since no precise facts are before us, the section 14 of the GST Act would have to be referred to by the applicant.

Further in respect of the liquidated damages if any collected/received under the previously applicable service tax regime before coming into effect of GST, would be dealt with in accordance with the then existant provisions under applicable laws and we do not any view with regard to the previous service tax regime being out of the scope of present authority.

d) Whether the contractor/ vendor will be able to utilize the amount of LD imposed over him Input Tax Credit subject to satisfying all other conditions?

The above question is not answered as the proper person to ask the above question would be the contractor /Vendor and not applicant.

Relevant Part of Advance Ruling

We have gone through the facts of the case. The questions posed are in respect of Liquidated damages’. We find that the applicant contends that these damages being towards deficiency of services and reduce the original consideration and will not be considered as separate service covered by the term ‘Obligation to tolerate an act or a situation.

As mentioned earlier, the above is the applicant’s understanding. What the applicant says needs to be supported by the agreement. We see that a contract Agreement between Maharashtra State Power Generation Company Limited (Owner) and Bharat Heavy Electricals Limited (Contractor) for Erection & Commissioning of Main Plant Package at Chandrapur T.P.S. Expansion Project 2 x 500 MW has been provided. The agreement consists of a set of various documents such as Letter of Award, Letter of Acceptance, etc. However, the first thing that we notice is that the agreement pertains to the period before the GST Act came into force. The applicant has submitted that the agreements are usually entered on the lines similar to the agreement submitted for our perusal.

A perusal of the above provisions make us observe that the contract price and the liquidated damages are two different aspects. Deduction of one from the other is a mere facilitation towards settlement of the accounts. This manner of giving effect to the obligations under the contract should not be deceptive of the actual intent. We observe so for reasons thus –

1. The agreement says that if the Contractor fails to achieve the trial operation of the unit within the stipulated time period as indicated above from the zero date then the Owner shall levy Liquidated Damages on the contractor @1/2% of the contract price for Erection, Testing & Commissioning along with applicable price variation per week of delay or part thereof subject to a maximum of 10% of the price for Erection, Testing & Commissioning along with applicable price variation. For the purpose of levy of liquidated damages, the contract price for Erection, Testing & Commissioning excluding Insurance charges and taxes & duties and the same for one unit shall be half of the total price.

2. The obligations on the Contractor calling for supply of the deliverables thereunder is one event. This event consisting of a supply occurs first. After occurrence of this event, there is evaluation in terms of whether the supply of the deliverables under the agreement were supplied within the time frame as agreed upon by the Contractor. This evaluation results in either a timely or delayed or a premature performance. The finding of this evaluation when there being a delay, the contingent liability of liquidated damage translate into an actual recoverable liability. This is the second event. What we say has been incorporated in the agreement in the words thus – The liability of payment of these liquidated damages bu the Contractor will be established once the delay in successful completion of trial operation is established on the part of the Contractor.

3. Both the events have their consequences. The first event calls for the payment of a contract price to the Contractor. The second event calls for payment of liquidated damages to the Owner.

4. The manner employed for recovery of the contract price or the liquidated damages would not define what a contract price or the liquidated damages mean.

5. The deduction from the amount as payable to the Contractor is for the purposes of adjustment of the accounts.

6. Though the situation is so, even if the agreement had clauses regarding deductions form the contract price, we are convinced that we wouldn’t have had a different opinion than the one as taken above. Both the contract price and the levy of liquidated damages are distinct events.

7. In the present case, we find that even the agreement does not support the act of deduction from the contract price as can be seen thus –

a. The clause relating to contract price and contract value say thus —

3.13 (A) Contract Price shall mean the total lump-sum price named in the contract for providing all services as per the scope of the contract including all applicable taxes, duties & insurance charges.

(B) Total Contract Price means the contract price plus the price variations, if any.

3.14 “Contract value” shall mean that part of the contract price which is properly apportionable to the plant or work in question having regard to the state, conditions and topographical location of the plant, the amount of work done and all other relevant circumstances and disregarding any changes that may have occurred since the date of contract in the cost of executing the works.

Neither the contract price nor the contract value refer to the eventuality of liquidated damages. Contract price is the total lumpsum price plus the price variations. There is no specific indication as to reduction in the contract price due to the levy of liquidated damages.

b. The price variations also have been set out in the agreement thus —

4.0 CONTRACT PRICE ADJUSTMENT / VARIATION

The price for erection, testing & commissioning excluding insurance charges and taxes & duties, shall be subjected to price variation as per the Terms of Bid Specification under ref.1 with Base Indices as on March 08. The price variation shall be subjected to a ceiling of (+1-) 20% of the contract price for Erection, Testing & Commissioning excluding taxes & duties and insurance charges.

As can be seen, the price variations to which the contract price would be subjected to makes no reference to the effect of levy of liquidated damages.

c. There is also a clause about deductions from the contract price thus –

16.0 DEDUCTIONS FROM TOTAL CONTRACT PRICE

16.1 The Owner shall claim all costs, damages or expenses that the Owner may have paid, for which under the contract the Contractor is liable.

The Owner to the Contractor shall bill all such claims regularly as and when they fall due. Such bills shall be supported by appropriate documents or explanations, to enable the Contractor to properly identify such claims. Such claims shall be paid by the Contractor within 15 (fifteen) days of the receipt of the corresponding bills and if not paid by the Contractor within the said period, the Owner may then deduct the amount from any monies due or becoming due by him to the Contractor under this contract or any other contract. These amounts may be recovered by actions of law or otherwise, if the Contractor fails to satisfy the Owner of such claims.

A perusal of the above clause suggests that when the Owner incurs certain expenses which should have been borne by the Contractor, there is a separate mechanism of recovery also other than recovery by way of adjustment from the payments to be made to the Contractor.

d. There is also a clause about Contractor’s default thus –

21.0 CONTRACTOR’S DEFAULT

21.1 If the contactor shall neglect to execute the works as defined in the contract with due diligence and expedition or shall refuse or neglect to comply with any reasonable orders given to him in writing by the Engineer in connection with the works or shall contravene the provisions of the contract. the ( tss ncr may give a notice in writing to the contractor to make good the failure. neglect or contravention complained off. Should the contactor fail to comply with the notice within 30 (thirty) days from the date of ser% icc thereol: then and in all such cases, the owner shall be at liberty to employ other workmen and !Urdu% ith execute such part of thew orks as the contractor may have neglected to do or, if the owner shall deem fit, it shall be lawlid for him. \‘ idiom prejudice to any other right he may have under the contract. to take the works wholly or in part out of the contactor’s hand and re-contract with any other person or persons to complete the works or any part thereof.

The owner shall he entitled to retain and apply any balance which may otherw ise be due to the contactor or such part thereof, as may he necessary, to the payment of cost of executing the said part of the works or of completing the works. If the cost of executing the said part of the works or of completing the works thereof as aforesaid shall exceed the balance due to the contractor, the contractor shall pay such excesses. Such payment of excess amount shall be independent of the liquidated damages for delay w hick the contactor shall have to pay if the completion of works is delayed.

It can be seen from the above that payment of liquidated damages is treated as an independent liability under the contract. It is not to be mixed with other payments due to the Owner from the Contractor.

e. The clause relating to payment towards advance or payment for execution, testing, commissioning also does not require invoices to be considered taking into consideration the liability towards liquidated damages. The invoices to be prepared are in terms of the contract price. And we see that the bills as submitted for our perusal also do not show a bill being raised after considering liquidated damages. The bills are for work done during a particular period and are accompanied by a Certificate which says in a pointwise manner as to how the amounts have been arrived at. On this Certificate, there are some rough workings as made by the applicant which show calculations involving subtractions, one such subtraction being for liquidated damages. However, if we minutely look at the deductions, it is seen thus –

Invoice as raised by the Contractor		Rough working by the Owner (applicant)
1.Boiler & Aux — Unit-9 For the work done during March’13 As per the Annex. Enclosed	375,29,811	37529810 4174816
	375,29,811	41704626
2.Less: Advance @ 10%	37,52,981	3752981	Advance
3.Less: Compin. of P.C. Test(5%)	18,76,491	1876491	Retention
4.Net Billing (4)=(I)-(2)-(3)	319,00,339	759033	Tax
5.Service Tax @12.36% on 90% billing	41,74, 816	5629471	against L.D — 15%
0. Net billing with Service Tax (6) = (4)+(5)	360,75,155	12017976	Deductions
		29686680	N. pay

What the above rough calculations as shown by the applicant reveal is that the amount shown as Net and Tax is acceptable to the applicant. It is only while making the payment of the above acceptable amount that the applicant deducts some amount towards liquidated damages. Thus, the value of the work done and which is to be paid is not affected by the amount deducted therefrom towards liquidated damages. Thus, the consideration for the work done remains unaltered. How the amount for the work done is discharged between the parties should not bother the Taxmen as these are the adjustments between the parties. For the Taxman, what would matter is the value for the work done. And once this valuation is properly done and tax liability thereon discharged, whether this value is paid partially or not paid at all would not be a concern from the taxation perspective but a matter between the contracting parties.

The above treatment by both the parties reveals two things –

It negates the contention that since recovery of Liquidated Damages is a part of the contract, the value of the main supply reduces to the extent of Liquidated Damages deducted by the applicant.
It confirms the position as brought out in the agreement clauses that recovery of Liquidated Damages is an independent liability.
The manner of deducting the amount of Liquidated Damages from the amount payable to the Contractor does not alter the valuation of the deliverables or the supplies made under the agreement.

8. We have to observe that the applicant is not the supplier in terms of the amounts
received as contract price or contract value. The GST Act under clause (a) of section 95 defines that an Advance Ruling is in relation to the supply of goods or services or both being undertaken or proposed to be undertaken. However, the exercise of looking at the contract price or contract value becomes necessary as the applicant has relied on the following provision in sub-section (1) of section 15 of the GST Act to claim that the reduction of the amount towards Liquidated Damages amounts to reducing the value of the supply. It also becomes necessary as the applicant informs that the Liquidated Damages so deducted are treated as income of the applicant. The provision reads thus-

Value of taxable supply.

15. (I) The value of a supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply.

In the present case, the agreement clauses as reproduced above, the invoice as prepared and the calculation, as reproduced above, as made by the applicant reveal that there are no two opinions between the contracting parties that the value of the supply as received by the applicant does not include the liquidated damages. There are measures identified in the agreement to arrive at the contract value or the invoice value. The words “price actually paid or payable” in respect of the value of the goods or services supplied do not come into play in the present set of facts of deduction of the amount towards liquidated damages. We have seen above that this deduction does not mean that the price actually paid is less. The income of the applicant is recovered by deducting from the outgoings of the applicant. This would not translate into making the income of the applicant as being the other party’s lesser income or the applicant’s lesser expenditure. We have seen above that the contract price and the liquidated damages are independent events.

9. We find that the applicant has argued that it was never the intention of the company to
get its supplies/project delayed nor the contractors want to make delay and thereby causing company to tolerate it. In this regard, we have to observe that if an agreement has such a clause and if the eventuality actually happens then the GST Act has provided for such an eventuality in terms of the provision as follows :

SCHEDULE II [See section 7)

ACTIVITIES TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES

5. Supply of services

The following shall be treated as supply of services, namely:—

(e) agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act;

In the present case, the agreement provides that the liability of payment of these liquidated damaees by the Contractor will be established once the delay in successful completion of trial operation is established on the part of the Contractor. Thus, the act of delayed supply has happened. The same is being tolerated by an additional levy in the nature of liquidated damages. The agreement has also provided that the payment by Contractor or deduction by Owner of any sums under the provision of this clause shall not relieve the Contractor from his obligations to complete the works or from his other obligations under the contract. This provision just ensures that the obligations under the contract are fulfilled. The facts are much obvious that the empowerment to levy liquidated damages is for the reason that there has been a delay and the same would be tolerated, but for a price or damages. The impugned income though presented in the form of a deduction from the payments to be made to the Contractor is the income of the applicant and would be a supply of ‘service’ by the applicant in terms of clause (e) of para 5 of Schedule II appended to the GST Act.

10. The applicant has referred to a few case laws and provisions to draw inferences in support of the contentions as made. We have gone through these case laws and find that the facts are not in pari-materia to the case before us. In H.F.C.L (cited supra), the CESTAT, New Delhi quoted the observation of the Larger Bench in Victory Electricals (cited supra) that that wherever the assesse, as per terms of the contract between the parties and on account of delay in delivery of manufactured goods, is liable to pay a lesser amount than the generally agreed price as a result of a clause stipulating variation in the price, on account of liability to “liquidated damages” irrespective of whether the clause is titled “penalty” or “liquidated damages”, the resultant price would be the “transaction value” and such value shall be alone liable to levy of excise duty, at the applicable rate. In the present case, there are no such clauses as would tantamount to reducing the contract price or the contract value of the supplies of goods or services or both as made by the Contractor. In fact in the present case, the levy of liquidated damages is specifically identified as an independent levy. We have seen that the Contract Price Variation clause in the impugned agreement, does not provide for variation on account of liquidated damages. And above all, we have seen the intent as being reflected in the treatment of the parties as not to alter the value of the work done and the tax liability on such value while making deductions therefrom. The reliance on case laws is, therefore, not helpful to the applicant. The facts of the instant case before us being distinct, we would refrain from discussing the other points in support of the contention.

Having seen as above, we refer to the questions as posed for our decision.

Question 1

Whether GST is applicable on Liquidated Damages in case of Operation & Maintenance activities and Construction of new power plants or renovation of old plants Or is applicable in both cases?

Question 2

GST is applicable, kindly clarify the following related aspects also Whether the GST on Liquidated Damages is covered under Schedule II entry No 5(2) (e) vide HSN code 9997-Other services rate 18% is correct or any other entry is relevant?

To answer the question as regards the schedule entry and the tax rate applicable, we find that there is no specific schedule entry in the Notification no. 11/2017 – Central / State Tax (Rate) [as amended from time to time] for taxable services and the Notification no. 12/2017-Central / State Tax (Rate) [as amended from time to time] for services exempt from GST. A reference to the Annexure about Scheme of Classification of Services as appended to the Notification no. 11/2017-Central/ State Tax (Rate) [as amended from time to time] reveals thus –

S. No.	Chapter, Section, Heading, Group	Service Code (Tariff)	Service Description
700	Heading 9997		Other services
716	Group 99979		Other miscellaneous services
720		999794	Agreeing to tolerate an act
722		999799	Other services nowhere else classified

In view of the above, following schedule entry under the Notification no. 11/2017-Central/ State Tax (Rate) [as amended from time to time] for taxable services would cover the impugned levy of liquidated damages –

SI. No.	Chapter, Section or Heading	Description of Service	Rate (per cent.) [CGST + MOST]
35	Heading 9997	Other services (washing, cleaning and dyeing services; beauty and physical well-being services; and other miscellaneous services including services nowhere else classified).	18% (9% + 9%)

We would be constrained to restrict the answer to this question in terms of only the agreement placed before us. The question would stand answered by the following clauses in the agreement –

10.0 LIQUIDATED DAMAGES

10.1 If the Contractor fails to achieve the trial operation of the unit within the stipulated time period as indicated above from the zero date then the Owner shall levy Liquidated Damages on the contractor @1/2% of the contract price for Erection, Testing & Commissioning along with applicable price variation price per week of delay or part thereof subject to a maximum of 10% of the price for Erection, Testing & Commissioning along with applicable price variation. For the purpose of levy of liquidated damages, the contract price for Erection, Testing & Commissioning excluding Insurance charges and taxes & duties and the same for one unit shall be half of the total price.

Section 3 — Special Conditions of Contract

7.0 LIQUIDATED DAMAGES FOR DELAY IN ERECTION, TESTING AND COMMISSIONING

7.1 The Contractor shall strictly adhere to the Project Completion Schedule to achieve the trial operations of units 8 & 9 by
41 and 44 months respectively. In case the Contractor fails to achieve successful completion of Trial Operation within specified time period as per the Proiect Completion Schedule due to delay on his part, then the Owner shall levy liquidated damages.

7.2 Time Schedules indicated for various activities are for the purpose of monitoring to ensure work completion as per Project Completion Schedule. Only the successful completion of Trial Operation of the unit shall be considered for the purpose of levy of Liquidated Damages.

7.3 The payment by Contractor or deduction by Owner of any sums under the provision of this clause shall not relieve the Contractor from his obligations to complete the works or from his other obligations under the contract.

7.4 The liability of a payment of these liquidated damages by the Contractor will be established once the delay in successful completion of trail operation is established on the part of the Contractor and the Owner shall not be required to take any further action like arbitration or approaching the Court of law for levying the Liquidated damages.

7.5 Since the Liquidated damages are limited and the same cannot compensate the consequential loss of the Owner due to n the part of the Contractor, the Owner reserves the right to get the work done at the risk and cost of the Contractor, e delay on the part of the Contractor has been established after giving notice to the Contractor, as may be deemed the interest of completing the balance works.

7.6 If the Contractor fails to achieve the Trial Operation of the unit within the time period specified in the Project Completion Schedule due to reasons attributable to him then the owner shall levy Liquidated damages on the Contractor 4^–!`₎ 1/2% of the contract price for erection, testing and commissioning (excluding insurance charges taxes and duties) along with applicable price variation per week of delay or part thereof subject to the maximum 10% of the contract price for erection, testing and commissioning (excluding insurance charges taxes and duties) along with applicable price variation .

7 7 For the purpose of deciding the amount of Liquidated Damages on the erection price, contract price along with applicable price variation (excluding taxes, duties and insurances charges.) as per contact price adjustment shall be considered.

Further Liquidated Damages for each Unit shall be levied separately and for this purpose, price of one Unit shall be half of the price of both the units.

All the above clauses reveal that the levy of liquidated damages is not when the delay is occurring. The Agreement expressly provides that liability of payment of these liquidated damages by the Contractor will be established once the delay in successful completion of trial operation is established on the part of the Contractor. This would define the time of supply.

d) Whether the contractor/ vendor will be able to utilize the amount of LD imposed over him Input Tax Credit subject to satisfying all other conditions?

The above question is not answered as the proper person to ask the above question would be the contractor /Vendor and not applicant.

06. In view of the deliberations held hereinabove, we order as follows:

ORDER

(under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)

NO.GST-ARA- 15/2017-18/B-30

Mumbai, dt. 08/05/2018

For reasons as discussed in the body of the order, the questions are answered, as under, in terms of the agreement between Maharashtra State Power Generation Company Limited (Owner) and Bharat Heavy Electricals Limited (Contractor) for Erection & Commissioning of Main Plant Package at Chandrapur T.P.S. Expansion Project 2 x 500 MW —

Q.1 Whether GST is applicable on Liquidated Damages in case of

Type 1 i.e. Operation & Maintenance activities

Type 2 i.e. Construction of new power plants or renovation of old plants

Or is applicable in both cases?

A.1 In terms of the aforesaid agreement, GST would be applicable on the Liquidated Damages.

Q.2 If GST is applicable, kindly clanfiy the following related aspects also –

Q.2(a) Whether the GST on Liquidated Damages is covered under Schedule II entry No 5(2)(e) vide HSN code 9997-Other Services rate 18% is correct or any other entry is relevant?

A.2(a) In terms of the aforesaid agreement, schedule entry no.35 of the Notification no. 11/2017 – Central [as amended from time to time] for taxable services would cover the impugned levy of liquidated damages.

Q.2(b) Liquidated Damages is determined and imposed upon the contractor after in-depth study. In such case, what will be construed as the time of supply. Will it be the period in which delay is occurring or it is the time when decision to impose Liquidated Damages is taken?

A.2(b) In terms of the aforesaid agreement, the clauses reveal that the levy of liquidated damages is not when the delay is occurring but the liability of the payment of these liquidated damage bu the contractor will be established once the delay in successful completion of trail operation is established on the part of the Contractor. This would define the time of supply.

Q,2 (c) If some part of delay has occurred before GST roll-out and some part of delay has occurred after GST roll-out, whether GST will be applicable to the Liquidated Damages imposed for entire period of delay or to the period falling after GST roll-out? In case when GST is to be imposed for period after date of GST rollout but due to maximum capping of LD, the amount of LD is calculated at given percentage instead of being period-based, then how GST needs to be levied.

A.2(b) Sub-section (1) of section 13 of the GST Act provides that the liability to pay tax on services shall arise at the time of supply. In view thereof as discussed in the answer to the Q.2(b), the agreement clauses would have to be referred to. Since no precise facts are before us, the section 14 of the GST Act would have to be referred to by the applicant.

Q.2(d) Whether the contractor/vendor will be able to utilize the amount of LD imposed over him as Input Tax Credit subject to satisfijing all other conditions?

A.2(d) The above question is not answered as the proper person to raise this question would be the contractor /Vendor and not applicant.