CA in Jaipur | CA. Yogesh Jangid |ITR Filing 2023 | Company Registration | NGO Registration | Income Tax Raid Cases | Audit | Inc Incroporation | CPA in India | Subsidy | Project Funding | GST | GST Raid Cases | Income Tax Notice Faceless | DRI Cases | https://www.nyca.in ITR Filing 2023 | Company Registration | NGO Registration | Income Tax Raid Cases | Audit | Inc Incroporation | CPA in India | Subsidy | Project Funding | GST | GST Raid Cases | Income Tax Notice Faceless | DRI Cases Sat, 06 Jul 2024 06:15:51 +0000 en-US hourly 1 https://wordpress.org/?v=6.9.1 https://www.nyca.in/wp-content/uploads/2022/08/9060CA_logo_icai-1.jpg CA in Jaipur | CA. Yogesh Jangid |ITR Filing 2023 | Company Registration | NGO Registration | Income Tax Raid Cases | Audit | Inc Incroporation | CPA in India | Subsidy | Project Funding | GST | GST Raid Cases | Income Tax Notice Faceless | DRI Cases | https://www.nyca.in 32 32 Odisha AAR Ruling on ITC on Exempt Services with Charged GST – EFC Logistics Case https://www.nyca.in/odisha-aar-ruling-on-itc-on-exempt-services-with-charged-gst-efc-logistics-case/ https://www.nyca.in/odisha-aar-ruling-on-itc-on-exempt-services-with-charged-gst-efc-logistics-case/#respond Sat, 06 Jul 2024 06:15:51 +0000 https://www.nyca.in/?p=12068 Understand the Odisha AAR ruling on Input Tax Credit (ITC) eligibility for recipients on exempt services where GST is charged. Get insights from the EFC Logistics India Pvt. Ltd. case.

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Introduction:

The Odisha Authority for Advance Ruling (AAR), in the matter of EFC Logistics India Pvt. Ltd. (In Re: EFC logistics India (P.) Ltd., [ORDER NO. 08/ODISHA-AAR/2023-24 dated May 24, 2024]), addressed whether a recipient can claim Input Tax Credit (ITC) on exempt services where the supplier has charged GST. This ruling pertains to the applicability of GST on renting of vehicles, which is exempted under Notification No. 12/2017-Central Tax (Rate).

Facts of the Case:

EFC Logistics India Pvt. Ltd. (“the Applicant”), a Goods Transport Agency (GTA), opted to pay GST at a rate of 12% with Input Tax Credit (ITC). They intended to engage Govinda Transport Pvt. Ltd., another GTA service provider, for vehicle rental services, including fuel, tools, driver salaries, and related expenses. These services are exempt under Entry No. 22(b) of Notification No. 12/2017-Central Tax (Rate), and the supplier did not charge GST on these exempt services.

The Applicant sought an advance ruling on whether the vehicle owner (supplier) could charge GST despite the services being exempt under the notification. Additionally, they questioned whether they could claim ITC based on invoices where GST was charged.

Issue:

  • Can the supplier charge and remit GST on services that are exempt under the applicable notification?
  • Whether the recipient (Applicant) is eligible to claim Input Tax Credit (ITC) based on invoices where GST has been charged by the supplier on exempt services?

Held:

The Odisha AAR, in ORDER NO. 08/ODISHA-AAR/2023-24, held as follows:

  • The service of renting vehicles, despite being exempt, does not fall under the activities undertaken by the Applicant, hence no ruling was provided on this aspect.
  • According to Section 16(1) of the CGST Act, every registered person is entitled to claim ITC on supplies of goods or services used in the course or furtherance of business, subject to the conditions and restrictions specified under Section 16.
  • Since the Applicant pays GST under the Forward Charge Mechanism at 12%, they may claim Input Tax Credit (ITC) provided they fulfill the conditions outlined in Section 16 of the CGST Act, even if the supplier has charged GST on exempt services.

This ruling clarifies the eligibility of recipients to claim ITC on GST charged by suppliers on exempt services under specific conditions governed by the CGST Act.

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]]> https://www.nyca.in/odisha-aar-ruling-on-itc-on-exempt-services-with-charged-gst-efc-logistics-case/feed/ 0 GST Exemption for Design Engineering and Construction Services by Governmental Authority: Case Analysis https://www.nyca.in/gst-exemption-for-design-engineering-and-construction-services-by-governmental-authority-case-analysis/ https://www.nyca.in/gst-exemption-for-design-engineering-and-construction-services-by-governmental-authority-case-analysis/#respond Tue, 02 Jul 2024 07:21:07 +0000 https://www.nyca.in/?p=11892 Explore the Uttarakhand AAR ruling exempting GST on design engineering and water tank construction services by a Governmental Authority. Understand implications under Notification No. 12/2017-Central Tax (Rate).

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Introduction: In the case of M/s. THDC India Limited v. Uttarakhand AAR [Advance Ruling No. 06/2023-24 dated February 26, 2024], the Uttarakhand Authority for Advance Ruling (AAR) addressed the applicability of GST on services provided by a Governmental Authority for design engineering and construction of water tanks.

Facts of the Case: M/s. THDC India Limited, a Public Sector Enterprise, entered into a Memorandum of Understanding (MOU) with Uttarakhand M/s Peyjal Sansadhan Vikas Evam Nirman Nigam (“Service Provider”) for the construction of a 500 KL RCC Overhead Tank at their campus in Rishikesh. The MOU specified that the Service Provider would perform design, engineering, and construction services on a “Deposit / Cost plus basis,” excluding GST and Labour Cess. Despite this, the Service Provider invoiced GST under Forward charge.

Issue: The main issue was whether GST is applicable on services of design engineering and contraction of water tank by the Government Authority.

Held: The Uttarakhand AAR ruled as follows:

  • The Service Provider does not qualify as a "Local Authority" under the GST provisions, hence Reverse Charge Mechanism (RCM) does not apply to the recipient, M/s. THDC India Limited.
  • The Service Provider is classified as a "Governmental Authority" and services provided under the MOU are exempt from GST under Notification No. 12/2017-Central Tax (Rate), which applies to services by governmental authorities related to functions entrusted to municipalities or panchayats under the Constitution of India (Articles 243W and 243G).
  • Therefore, GST is not applicable on the services of design engineering and construction of water tanks by the Governmental Authority in this case.

This ruling clarifies the GST treatment for services provided by Governmental Authorities under specific contractual arrangements, highlighting exemptions under relevant GST notifications.

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