K N R Srirangam Infra Pvt Ltd. Vs State Tax Officer (Madras High Court)
Madras High Court held that petitioner providing services to National Highways Department of India (NHAI) is not liable to pay GST till either invoice is raised or amount/ payment is received in Annuities.
Facts- Petitioner is providing services to the National Highways Department of India and that the considerations are received in two parcels. 40% of the consideration is received during the execution of work and remaining 60% of the consideration is received annually over the next 14 years.
It is the contention of the Department that since the work has been substantially completed, the petitioner was liable to pay tax on the entire value of the work. The said contention of the department is challenged by the petitioner.
Conclusion- Held that the petitioner is not liable to pay tax if no invoice is raised by the petitioner on the NHAI. As and when the petitioner either raises invoice for payment of the amount in 30 Annuities qua balance 60% or receives amounts in Annuities, the petitioner would be liable to pay tax. Merely because, the petitioner has sub-contracted the work and completed the work in advance for receiving the payments in the form of Annuity over a period of 15 years would not either disentitle the petitioner to avail input tax credit on the tax charged by the sub-contractor on the petitioner or to draw an inference that the petitioner was indeed liable to pay tax on the entire value of the contract with NHAI, even though the petitioner has neither raised any invoice nor received the payment.
