Levy of GST — Applicant sought Advance Ruling on the following questions:

1. Whether the Transitional Provisions under Section 142(11)(c), (Chapter XX) of TNGST Act, 2017/CGST Act, 2017 is correctly applicable for the remaining installments of “Mobilization Advance’, which transitioned into the GST regime and to be adjusted/deducted by THE APPLICANT post the implementation of GST (i.e. Post July 1, 2017)

2. Whether, THE APPLICANT would be liable to pay GST, under the provisions of the TNGST Act, 2017/CGST Act, 2017 and allied laws, on the installments of the ‘Mobilization Advance’, which has transitioned into the GST regime and adjusted ‘deducted by THE APPLICANT post the implementation of GT (i.e. post July 1, 2017)

3. Whether, THE APPLICANT would be eligible to avail Input tax Credit (ITC) on Service Tax paid which was transferred from Pre-GST period through TRAN-1 Return filed in terms of the section 142(11)(c), under Transitional Provisions (Chapter XX) of both TNGST Act, 2017/CGST Act, 2017.

In the case at hand, the applicant has paid Service Tax on the advance received as per the said statute for which the applicant has raised invoice on their service receiver along with the component of service tax but no VAT has been paid/received from their customer on that part of the Mobilisation Advance pertaining to materials and therefore, this provision do not apply to the case at hand. Accordingly, we hold that the transitional provisions under Section 142(11)(c) is not applicable to the case of the applicant.

Further ‘Supply of Works Contract’ is deemed to be a service under GST. Under the pre-GST regime, service tax was leviable on the service portion of the Works Contract, which in the case at hand being original work, was levied on 40% of the value. The applicant on receipt of advance has paid the service tax on the 40% of the value as required under the provisions of Service Tax. The like situations are more aptly covered under the transition provision at Section 142(11)(b) wherein it is stated that no tax is payable on services under the GST Act to the extent the tax was leviable on the said services under Chapter V of the Finance Act. Therefore, we conclude that GST is not payable on the Mobilisation advance which has been received prior to GST implementation as per Section 142(11)(b) of the Act. — Shapoorji Pallonji And Company Private Limited., In Re.. [2020] 20 TAXLOK.COM 122 (AAR-Tamil Nadu)