Authority for Advance Ruling (AAR)

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

Type1 ie. Operation & Maintenance activities

Type2 ie. 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.

Q2. If GST is applicable, kindly clarify the following related aspects also

Q2A. 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?

i. By virtue of tripartite agreement between NDDB, State Government & Unions, whether the arrangement between NDDB and Unions would be considered as supply between ‘related persons’ in accordance with Schedule 1 of the Central Goods & Service Tax Act, 2017?

ii. Assuming answer to above point is affirmative, whether the applicant would be required to determine value of activities undertaken by them in accordance with Section 15(5) of CGST Act, 2017 read with Rule 28 of the CGST Rules, 2017?

Case I

Q. Whether on the facts and circumstances of abovementioned case can the above activity be called as canteen activity and the applicable rate of 5% be charged on our bills?

Answered in the negative.

Case II

Q. Can both the activities put together i.e. supply and distribution of food to the employees of 'A' Ltd. be called as canteen services and applicable rate of 5% be charged on our bills?

Answered in the negative.

Case III

Q. Under such circumstances can it still be claimed that Merit Hospitality is running a canteen and the applicable rate of 5% be charged on our bills?

Answered in the negative.

Case IV

Q.A. Can Merit Hospitality claim that since the food is supplied directly to SEZ area hence no GST is applicable?

A.a. In view of the findings above the said question cannot be answered.

Q.b. Can Merit Hospitality claim that it is running a canteen in SEZ area hence no GST is Applicable?

A.b. In the view of detailed discussions above, The question answered is negative.

Q.c. Can Merit hospitality claim that it is running a restaurant in SEZ area and hence applicable GST rate is 5% only?

A.c. In the view of the detailed discussions above the question is answered in the negative

Question -1 -Determination of GST leviable on operation and maintenance work order given by such Municipal Corporation.

Answer: Under GST Act, 2017, their services attracted CGST & SGST @ 9% each with effect from 01.07.2017 and CGST & SGST @ 6% each with effect from 22.08.2017. Post 25.01.2018, their services would be exempt only subject to fulfilment of conditions that the value of supply of goods does not exceed 25% of value of composite supply

Question-2- Admissibility of ITC (input Credit tax) of purchases against such work order.

Answer:- The applicant is eligible for availing ITC (input Credit Tax) of purchases against such work order under the GST Act/Rules subject to the terms and conditions mentioned in section 16 to 22 of the GST ACT and rules 36 to 45 of the GST Rules 2017.

Question - 3 Determination of responsibility of municipal authority of discharging such CST Liability payable to the contractor.

Answer: The liability to pay GST is on the supplier, being a legal liability and no comments are offered in respect of recovery or otherwise from the recipient.

Question - 4 Further, we seek guidance from GST Council/Appropriate authority towards applicability of GST on Service Contract where labour job Contribute 95% to 98% if Contract Value and 2-3% as Oil and Lubricant and pertains to consumable Purchase to operate the Existing Plant.

Answer: Under GST Act, 2017, their services attracted CGST & SGST @ 9% each with effect from 01.07.2017 and CGST & SGST 6% each with effect from 22.08.2017. Post 25.01.2018, their services would be exempt only subject to the fulfilment of condition that the value of supply of goods does not exceed 25% of value of composite supply.

Determination of time and value of Supply of goods and services or both.

Whether the product power bank which is used to charge portable devices can be classified under heading 8504 – having description “Electrical Transformers, Static converters (For Example, Rectifiers) And Inductors?

(a) Whether under Reverse Charge Mechanism, IGST should be paid by theimporter on ocean freight in case of CIF basis contract, when service provider and service recipient both are outside the territory of India.

(b) If point no. answer is yes, then what will be the supporting document forimporter under RCM to take the credit of IGST paid on ocean freightunder CIF basis contract

(c) Whether credit will be available in GST of office fixtures & furniture, A.C.plant & sanitary fittings on' newly constructed building on its ownaccount for furtherance of business and accounting entry is capitalized in books of account

Classification and Rate of Tax when maintenance of railways tracks is done by them by providing contractor’s labour only in cases where the Railways supply materials free of cost and when maintenance of railways tracks is done by them by providing, both, contractor’s material and labour.

(i) The nature of Services whether covered under Sl. No.3(VI)(a) of Notification No.11/2017-CT(R) dated 28.06.2017 amended with Notification No.24/2017- CT(R) dated 21.09.2017 and further amended with Notification No.31/2017- CT(R) dated 13.10.2017 ?

(ii)  What is the Rate of GST applicable for the project ?

(iii) If applicable rate of GST @ 12%, what is the rate of GST applicable on subcontractors leg ?

Whether the activity of fabrication & fitting and mounting of bus bodies on the chassis supplied by the other party is a job work (SAC 9988 or contract of sale of bus body HSN CODE 8707?