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Case Law Details

Case Name : In re Tejas Constructions & Infrastructure Private Limited (GST AAR Maharashtra)
Appeal Number : Advance Ruling No. GST-ARA- 03/2019-20/B-90
Date of Judgement/Order : 20/08/2018
Related Assessment Year :
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In re Tejas Constructions & Infrastructure Private Limited (GST AAR Maharashtra)

Question No. 1 Whether the contractor can charge GST on the value of material supplied by the recipient of service?

Section 15 of CGST Act, 2017 contains provisions with respect to Valuation of taxable supply. The said Section has been reproduced by the applicant and is mentioned above. As per clause 2 (b) of Section 15, any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both.

We find that the concerned materials are essential components for supply of construction service by the applicant to the contractee. Section 15 (2) (b) very clearly states that the supplier i.e the applicant in this case, is liable to pay in relation to such supply (supply of concerned materials by the contractee in this case) if the cost of the same has been incurred by the recipient of the supply (the contractee in this case) and the cost is not included in the price actually paid or payable for the goods or services or both. We find that the cost the materials supplied by the contractee is included in the value of the entire contract and GST is being paid on the entire value of contract and hence the applicant is discharging GST on the value of materials supplied by the contractee.

In the subject case, the material is supplied by the contractee and therefore the question raised by the applicant as to whether they can charge GST on the same is irrelevant. The applicant, on this issue of supply of concerned materials, is not a supplier of goods/services and as per the provisions of Section 95 of the CGST Act, they cannot raise this question. Hence the question is not answered.

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