In re Broadcast Engineering Consultants India Limited (GST AAR Uttar Pradesh)
As per Section 2 (31) of CGST Act, 2017 ‘consideration’ includes any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government. It also includes the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government.
As such, the consideration would include the entire payment received by the applicant against manpower supply and GST would be payable on the entire amount collected by the applicant from the service recipients which includes the salary amount/wages to be paid to the labours as well as the reimbursement of EPF and ESI contribution.
Section 15 of the CGST Act, 2017, which pertains to Valuation of taxable supply clearly stipulates that the value of 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. Further, sub-section (2) of Section 15 elaborates in detail, the items that are required to be included in the value of supply, whereas sub-section (3) of Section 15 specifically elaborates the items that are not to be included in the value of supply.
As per Section 15 of the CGST Act, 2017, there is intent to include even all taxes, duties, cesses, fees and all charges in the value of supply and there can be no exception for ESI and EPF amount. Therefore, taking into the view the definition of ‘consideration’ and the aspect of ‘valuation of supply’ as discussed above, it is apparent that the GST is chargeable on the entire amount received by the applicant against supply of manpower.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING,UTTAR PRADESH
1. M/s Broadcast Engineering Consultants India Limited, 2C-56, A/17, C-Block, Phase-2, Industrial Area, Sector-62, Noida-201301 (here in after referred to as the applicant) is a registered assessee under GST having GSTN: 09AAACB2575L1ZG.
2. The applicant has sought advance ruling on following questions-
Whether we should charge GST @18% for taking reimbursement of expenses i.e., Basic Salary, ESIC, EPF, Bonus with service charge or only on service charge for providing pure service by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution?
And, whether this services i.e. taking reimbursement of expenses for deployed Manpower is NIL rated supply in GST?
3. The applicant have submitted statement of facts in Form GST ARA-01 as under-
(i) the applicant is a Central Public Sector Enterprise under Ministry of Information Broadcasting and was established on 24th March, 1995 under the Companies Act, 2013 with 100% equity share capital held by Govt, of India.
(ii) the applicant was awarded contract from Madhya Pradesh Paschim Keshetra Vidyut Vitaran Company Limited (Govt. Entity) for providing “skilled, semi-skilled and Unskilled” manpower for miscellaneous work under the three circles, AGAR, JHABUA & SHIVPURL
(iii) the applicant are deploying manpower to the government entity as under-
