In re Woodkraft India Limited (GST AAR Maharashtra)
Q1&2 Whether in the facts & circumstances of case, applicant is liable to pay GST in respect of Tax Invoice No. 01 dated 25/06/2018 / R.A. Bill No 22 for Rs. 2,42,09,594/-, toward civil and interior work done of M/s Oil & Natural Gas Corporation Ltd. under provision CGST ACT? If the ruling on above question is affirmative, kindly clarify rate of tax applicable thereon?
Section 142(10) allows the levy tax on goods or services under GST Act, that are supplied only after appointed day i.e. 01/07/2017: in respect of RA Bill No. 22, (issue in the first two questions raised by the applicant), the applicant has carried out and completed the total work before the appointed day and only billing is done after the appointed day and that too after two year period. The applicant relies on the provisions of time of supply under Section 13 of GST Act. However. even as per the provisions under Section 13(2) (b) of GST Act, time of supply will be date of provision of service, if the invoice is not issued within the prescribed period. So this is not the activity being undertaken or proposed to be undertaken after the appointed day.
Further, the applicant has referred to the provisions under Section 142(2)(a) and submitted that the provisions under this Section allows the applicant to raise question on above issue under advance ruling provisions under the GST Act. Therefore, we have referred the provision under this Section. The provisions under this section provides for the treatment be given under GST Act in case of upward revision of prices and levy of tax thereon. The applicant has completed its work upto 31/01/2016 and raised the tax invoice on 25/06/2018. This tax invoice is in respect of the work done by him in pre-GST period. The amount charged in the invoice is in respect of work done as per the prices originally agreed upon in pre-GST period. Thus, there is no upward revision of any prices, as claimed by applicant, The contention of applicant is therefore not accepted. Thus. Thus, questions posed by applicant at Sr. No. (1) & (1) are non-maintainable under the provision of Section 95 of the GST Act.
Q3. Whether in the facts and circumstances of case, applicant is liable to pay GST on proposed reimbursement of Rs. 1,92,50,247/- from Mis Oil & Natural Gas Corporation Ltd., toward operational site expenses and claim toward rectification of water damages, pertaining to original civil & interior work contract awarded by M/s Oil & Natural Gas Corporation Ltd?
The documents submitted by the applicant as well as the oral submissions made, do not show that the said invoice has been raised in pursuance of increase in contract value. Further. from the submissions made by the applicant we that in respect of additional claim of Rs. 1,92,50,247/-„ the services of site expenses & certification of water damages was undertaken by the applicant and completed during the service tax regime. These services of site expenses & rectification of water damages arc in the nature of additional work entrusted to the applicant, claim against which was disputed by ONGC and on mediation by the O.E.C., the said amount has been said to be payable to the applicant. This amount does not appear to be paid to the applicant in lieu of increase in the value of the original contract. In fact, payment of this amount was being contested by ONGC only because they thought that the said damages had occurred during the course of performance of the contract by the applicant which was to be rectified by way of providing services of site expenses & rectification of water damages. Thus, we find that the amount of Rs. 1,92,50,247/- is nothing but payment to the applicant against services, rendered during the erstwhile service tax regime. Thus we find that even in the subject case where the invoice is not issued by the applicant, the work was already undertaken and completed well before the GST regime. Hence even in this case the activities undertaken by the applicant, does not pertain to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant as per the provisions of Seetion 95 of the GST Act. Hence we find that this authority cannot answer question no. 3 also.
Q4. If the ruling on above question is affirmative, kindly clarify rate of tax applicable thereon.
The question is non-maintainable, in view of the discussions made above.
FULL TEXT OF ORDER OF BEFORE THE AUTHORITY OF ADVANCE RULING, MAHARASHTRA
PROCEEDINGS
(Under Section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
The present application has been filed under Section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as the CGST Act and MGST Act”] by M/s. WOODKRAFT INDIA LIMITED, the applicant, seeking an advance ruling in respect of the following questions:
1. Whether in the facts & circumstances of case, applicant is liable to pay GST in respect of Tax Invoice No. 01 dated 25/06/2018 / R.A. Bill No 22 for Rs. 2,42,09,594/-, toward civil and interior work done of M/s Oil & Natural Gas Corporation Ltd. under provision CGST ACT.
2. If the ruling on above question is affirmative, kindly clarify rate of tax applicable thereon.
3. Whether in the facts and circumstances of case, applicant is liable to pay GST on proposed reimbursement of Rs. 1,92,50,247/- from Mis Oil & Natural Gas Corporation Ltd., toward operational site expenses and claim toward rectification of water damages, pertaining to original civil & interior work contract awarded by M/s Oil & Natural Gas Corporation Ltd.
4. If the ruling on above question is affirmative, kindly clarify rate of tax applicable thereon.
At the outset, we would like to make it clear that the provisions of both the COST Act and the MOST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the 7.:GST Act would also mean a reference to the same provision under the MOST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to “GST Act” would means CGST Act and MGST Act.
2. FACTS AND CONTENTION – AS PER THE APPLICANT
The submissions made by the applicant is as under:‑
2.1 M/s Woodcraft India Ltd (Applicant) is engaged in undertaking and execution of interior works and other works. M/s Oil & Natural Gas Corporation Ltd. (ONGC) has, vide Order No. MR/PO/4BP/BK/52 2013 dated 01/10/2013 awarded contract of civil & interior works of Green Building, Plot No C-69, Bandra-Kurla Complex, Mumhai 400-051, to the applicant for value of Rs. 57,45,18,007/- which was further revised to Rs. 60,74,89.569/- and period of completion of work was 6 months & 6 days from notification of award. Since work could not be completed within stipulated period, period was extended up to 31/01/2016, with application of liquidated damages clause.
2.2 Thereafter, Applicant issued R.A. Bill No 22 and issued corresponding Tax Invoice No 001 on 25/06/2018 for Rs. 2,42,09,594/- and charged the on CGST & MGST @ 9% at Rs. 21,78,863/- & Rs. 21.78,863/- respectively, with total amount of Rs. 2,85,67,321/-. ONGC made payment on 03/07/2018 but disputed the collection of CGST & MGST. Applicant accounted the said tax invoice in the books of accounts, paid CGST & MGST and accordingly filed d the return for the month of June-2018.
2.3 After issue of impugned final R.A. Bill No 22, question arose as to. for whose default/breach of contract, the execution of work could not be completed as agreed and had to be extended till 31/01/2016. Applicant vide letter dated 24/02/2016 raised claim for an amount of Rs. 10,11,78,725/- which was not accepted by CNGC. There were also other issues in dispute like; (a) for whose default or breach execution of works was delayed; (b) what amount is payable to ONGC or Applicant for loss cr damage suffered by either of them for breach committed by other party, etc.
2.4. Since the dispute between applicant and ONGC could not be settled, the Chief Legal Services of ONGC constituted on O.E.0 (Outside Expert Committee) to conciliate and help them to reach an amicable settlement.
2.5 O.E.C. vide report dated 21/05/2019 rejected claim of Rs. 6,07,48,957/- of liquidated
damages made by ONGC and following claims of the applicant have been recommended
a) Operational Site Expenses Rs. 65,19,560/‑
b) Rectification of rain water damages Rs. 1,27,30,6871‑
c) Interest @12% on above amt.
d) GST liability of Rs. 39,00,139/- to be paid as per GST Authority Ruling (on final RA Bill 22 for Rs. 2,85,67,321/-)
2.6 Claim of operation site expenses comprises of expenses incurred by the applicant for extension of insurance policy and hank guarantee due to delay in project on the part of ONGC and hiring of scaffolding. Details of which are as under.
a) Insurance Policy extension Rs. 33,27,925/-
b) Bank Guarantee extension Rs. 18,36,535/-
c) Hiring of Scaffolding Rs. 13,55,100/‑
Total Rs. 65,19,5601‑
2.7 Applicant made claim of Rs. 1.40,28.820/- toward certain damages which took place on account of rain water seepage for which contractor was not responsible. O.E.C. agreed to the claim and recommended to reimburse an amount of Rs. 1,27,30,687/- to an applicant.
2.8.a) Applicant issued final R.A. Bill. No 22/ Tax Invoice No ….. dated 25/06/2018 for civil & interior work to ONGC, Bandra – Kuria Complex, Mumbal 400 051. Details of which are as under.
