GST is applicable on the proposed receipt of money in case of Arbitration claims awarded for works contract completed in the Pre-GST regime.
Levy of GST—In the instant case, the applicant sought Advance Ruling on the following issues:
a. Whether GST is applicable on the proposed receipt of money in case of Arbitration claims awarded for works contract completed in the Pre-GST regime?
b. If the answer to the above question is Yes then under what HSN Code and GST rate the liability is to be discharged by the applicant?
The arbitration award speaks of many clauses in the agreement regarding certain milestones to be met and the cost to be paid to the applicant wherever such cost need to be paid according to the estimation made by the contractee.
As per the issues mentioned in the arbitration award, in case of any delay in issuance of drawings or failure to give possession of site the engineer shall determine the extension of time and amount of cost that the contractor may suffer due to such delays in consultation with the employer and the contractor. Therefore the time of supply of the service of tolerance is the time when such determination takes place. However, the contractee/employer has not determined the cost of delay prior to arbitration award. It was determined only by arbitration award on 09.05.2019. Therefore the time of supply of this service as per Section 13 of the CGST Act is 09.05.2019. The Consideration received for such forbearace is taxable under CGST and SGSt @9%. Each under the chapter head 9997 at serial no. 35 of Notification No.11/2017- Central/State tax rate.
Held that— GST is applicable as enumerated above.
GST is applicable on the proposed receipt of money in case of Arbitration claims awarded for works contract completed in the Pre-GST regime.
Levy of GST—In the instant case, the applicant sought Advance Ruling on the following issues:
a. Whether GST is applicable on the proposed receipt of money in case of Arbitration claims awarded for works contract completed in the Pre-GST regime?
b. If the answer to the above question is Yes then under what HSN Code and GST rate the liability is to be discharged by the applicant?
The arbitration award speaks of many clauses in the agreement regarding certain milestones to be met and the cost to be paid to the applicant wherever such cost need to be paid according to the estimation made by the contractee.
As per the issues mentioned in the arbitration award, in case of any delay in issuance of drawings or failure to give possession of site the engineer shall determine the extension of time and amount of cost that the contractor may suffer due to such delays in consultation with the employer and the contractor. Therefore the time of supply of the service of tolerance is the time when such determination takes place. However, the contractee/employer has not determined the cost of delay prior to arbitration award. It was determined only by arbitration award on 09.05.2019. Therefore the time of supply of this service as per Section 13 of the CGST Act is 09.05.2019. The Consideration received for such forbearace is taxable under CGST and SGSt @9%. Each under the chapter head 9997 at serial no. 35 of Notification No.11/2017- Central/State tax rate.
Held that— GST is applicable as enumerated above.