Page 56 - GSTL_2nd April 2020_Vol 35_Part 1

J22 GST LAW TIMES [ Vol. 35
• In case the revised GST-inclusive work value for the Balance Work
is less than the original agreement work value for the Balance Work,
the payment to the works contractor is to be reduced accordingly. In
case the excess payment has already been made to the works con-
tractor in pursuance of the original agreement, the excess amount
paid must be recovered from the works contractor.
• These procedures shall be applicable to all works contract including
those executed in EPC/Turn-key/Lumpsum mode.
The Court, considering the difficulty faced by the contractors due to change in
the regime regarding works contract under GST, observed that in case of F2 con-
tracts, the taxable value under GST for each item of the balance work is to be de-
termined by the competent authority applying the premium/discount offered by
the works contractor on respective item.
“The Administrative Departments should issue suitable instructions to
the Competent Authority responsible for making payments to the works contrac-
tors to implement this revised guidelines,” the Bench said.
[Source : http://www.taxscan.in, dated 27-3-2020]

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[Continued from page J12]

“In that view of the matter, in our considered opinion the provision of Sec-
tion 17(5)(d) is to be read down and the narrow restriction as imposed,
reading of the provision by the department, is not required to be accepted,
inasmuch as keeping in mind the language used in Eicher Motors Limited v.
UOI [1999 (106) E.L.T. 3 (S.C.)], the very purpose of the credit is to give
benefit to the assessee.”
It may be noted that taxes paid on input supply of goods or services are advance
GST paid by the supplier. The Supreme Court held in Eicher Motors Limited v.
UOI [(1999) 2 SCC 361 : 1999 (106) E.L.T. 3 (S.C.)],
“We may look at the matter from another angle. If on the inputs the as-
sessee had already paid the taxes on the basis that when the goods are uti-
lised in the manufacture of further products as inputs thereto then the tax
on these goods gets adjusted which are finished subsequently. Thus, a right
accrued to the assessee on the date when they paid the tax on the raw mate-
rials or the inputs and that right would continue until the facility available
thereto gets worked out or until those goods existed.”
In view of these, the correct legal position is as follows :-
(i) Activities conducted in pursuance of corporate social responsibility
is a business activity.
(ii) Such activities are done in course of or in furtherance of business.
(iii) Input Tax Credit on goods or services received to be used in such
activities are available as Input Tax Credit.
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GST LAW TIMES  2nd April 2020  120
( A22 )