~~. HPSEBLlF&A/A&RlGST/ I~ ' ~~ - {C)-51

Transcription

1 HIMACHAL PRADESH STATE ELECTRICITY BOARD LlMlTED (A State Govt. Undertal{ing) Registered Office: Yidyut Bhawan, HPSEBL, Shimla (HP) CIN:U40109HP2009SGC ~~. HPSEBLlF&A/A&RlGST/ I~ ' ~~ - {C)-51 Dated: ~}q)~ 1'1 The Superintending Engineers (Design), Electrical System, HPSEBL, Hamirpur- \7700 I. Subject:. Payment oftaxes and Duties against Purchase orders and Turnkey Projects awarded prior to implementation ofgst i.e. before Ref: Your office letter HPSEBLISEDES/GEN.lGST Claritication/ Sir, dated With reference to your office letter referred above it is informed that this office vide letter No HPSEBLlF&A/A&RlGST/ dated has communicated the probable solutions regarding supply orderl work order issued before and after GST implementation and discussed the issue in detailed during the meeting held on GST on dated with all the DDOs of HPSEBL. The points wise clarification/advice 09 points raised is as under: Sr. No Type of pre-gst Transaction Clarification A) mentioned in Contract Purchase Order! Supply Contract Work Contract I Turnkey Key projects in against Turnke~ Projects GST regime are supply of services and GST i) Self Manufactured items rate is for the contract value. However, if material and labour parts are separately definedl identified In the Contract, the rate of GST shall be different for material and erectionl labour as per HSN/SAC codes and the same needs to be re-negotiated with the Contractors, in view of availability of input Tax credit and anti profiteering provisions of GST. ii) Brought ou( items The quoted rates of Contract are inclusive of Excise duty, CST, Entry tax, the value of contractl project shall not be changed For instance, As per pre-gst contract agreement (which was inclusive of Y A T and Service Tax, if any) the value of the project is Rs. 1,00,0001-, the bili/ra bill under GST will arrive at the taxable value in accordance with the formula below: ~ ~~----~~--~ ~ Yalue = (Yalue inclusive of taxes) X 1001 (100 +Sum ofcgst & SGST tax rates)

2 So here, the project value (excluding tax), with, lets say, a GST rate of 6% CGST and 6% SGST, will be = 1,00,000 X = 89,285.70/ Thus the bill will be raised as follows B Erection Contract against Turnkey Projects Erection and Civil works Rs. Project Value (excluding tax) Add: 6% Add : 6% Total It is clarified that under no circumstances will there be a revision of an~ contractual values in the contract due to imqact of change in tax rate(s}2 if any2 from VAT/Service Tax to GST. The quoted rates of Contract are inclusive of all taxes applicable the value of contract/ project shall not exceed. For instance, say, as per pre-gst contract agreement (which was inclusive of VAT and Service Tax, if any) the value of the project is Rs. 1,00,000/-, the billlra bill under GST will arrive at the taxable value in accordance with the formula below: Value = (Value inclusive of taxes) X 100/ (100 + Sum ofcgst & SGST tax rates) It is clarified that under no circumstances will there be a revision of any contractual values in the contract due to imqact of change in tax rate{s}2 if an: 2 from VAT/Service Tax to GST. It is further informed that for removal of confusion among the field Units about applicability of GST on the Purchase orders for supply of material and awards placed on turnkey basis prior to implementation of GST, the following guidelines are to be followed with respect to the treatment of work contracts and supplies in the pre-gst and post-gst regime: 1. Pre-GST contracts for supply of goods: With regard to supply of only goods the following procedure is to be followed: Sr. Situation Mode of Treatment a. Goods supplied before lsi July 2017 While making payment to the

3 and invoice/bill also raised before 1 st supplier on or after 1 st July 2017: July 2017, but payment is made on or V AT will be applicable and after 1 st July 20)7 not the GST b. Goods suppl ied before 1 st July 2017 SGST and CGST rates will be and invoice/bill raised on or after 1 st applicable. c. Jul}" 2017 Goods supplied on or after 1 st July SGST and CGST rates will be 2017 and invoice/bill raised on or after appl icable. 1 st July Pre-GST contracts for supply of services: With regard to supply of only services (eg: Consultancy, Security Services, Cleaning etc.) the following procedure is to be followed: Sr. Situation a. Services supplied before I st July 2017 and invoice/bill also raised before) st July 2017, but payment is made on or after) St July 2017 b. Services supplied before 1 st July 2017 and invoice/bi II raised on or after 1 st July 2017 within 30 days from supply of service c. Services supplied before 1 st July 2017 and invoice/bill raised on or after 1 st July 2017 after expiry of 30 days from suppl}" of service d. Services supplied on or after I st July 2017 and invoice/bill raised on or after I st July2017 Mode of Treatment Service Tax is applicable. Service Tax is not applicable. Service Tax is applicable. SGST and CGST rates will be applicable. 3. Pre-GST Work Contracts: With regard to Work Contracts (e.g.: Roads, Buildings etc.) where the supply is of both goods and services: Sr. Situation Mode of Treatment a. Works Contracts executed V AT is applicable. completed before 1 st and July 2017 and invoice/bill also raised before 1 st July Service Tax is applicable. 2017, but payment is made on or after 1 st July 2017 b. Works Contracts executed and V AT is applicable. completed before 151 July 2017 and invoice/bill raised on or after lsi July Service Tax is not applicable by the contractor within 30 days after completing such contract c. Works Contracts executed VAT is applicable. completed before 1 st and July 2017 and invoicelbi II raised on or after 151 July Service Tax is applicable by the contractor after expiry of 30 days after com~leting such contract d. Works Contracts executed on or after SGST and CGST rates will be lsi July 2017 and invoice/bill raised on applicable. or after I Sl July 2017

4 When invoices/bills are to be raised by the contractor/supplier, the value of the bill together with the applicable tax under GST (i.e. SGST + CGST in case of local purchase from within the State) should not exceed the value that such contractor/supplier would have billed for prior to 1 51 July, 2017 inclusive of VAT and Service Tax, if any. For instance, As per pre-gst contract agreement (which was inclusive of VAT and Service Tax, if any) the value of the project is Rs. 1,00,000/-, the bill/ra bill under GST will arrive at the taxable value in accordance with the formula below: Value = (Value inclusive of taxes) X 100/ (100 + Sum ofcgst & SGST tax rates) So here, the project value (excluding tax), with, lets say, a GST rate of 6% CGST and 6% SGST, will be = 1,00,000 X 100/1 12 = 89,285.70/ Thus the bill will be raised as follows: Project Value (excluding tax) Add: CGST@ 6% Add: 6% Total Rs. It is clarified that under no circumstances will there be a revision of any contractual values in the contract due to impact of change in tax rate(s), if any, from VAT/Service Tax to GST. 4. Post-GST Contracts for supply of goods or services or both: I. With regard to post-gst contracts or ongoing projects where estimates have been approved before I SI July 2017 i.e. those work orders given/to be given for supply of goods or services or both (works contracts), GST rates will be applicable. In other words, the supplier of goods/services/both has to pay SGST and CGST on all taxable goods/services. 11. Under the HPV AT Act, "works contract" covered both movable and immovable property, whereas, " Works Contract" under GST is restricted only to immovable property. In GST, works involving supply of taxable goods along with labour to any movable property (e.g. servicing of motor vehicle with motor parts, AMC contract for computers or AC machines or generator, repair of furniture, etc.) has been referred to as "Composite Supply" as the supply of goods and labour are naturally bundled and made in conjunction with each other. The rate of tax for a "Composite Supply" will be that of the principal supply. In other words, the pre-dominant nature of the contract will be the deciding factor. The principal supply can either be of service or goods. For instance, in the case of

5 u servicing of motor vehicles or AMC contracts the supply is service and the rate of tax on service shall be applicable. On the other hand, where a contract is for supply-cum-installation of AC machine,t~en here the principal supply will be AC machine and the rate oftax of the AC machine will be applicable. iii) No TDS under GST is to be deducted till Section 51 (i.e. the Section relating to TDS) of the SGST/CGST Act is notified and made operative. Difficulty, if any, in the implementation of the above instructions may be brought to the notice ofthis office through SEs/AAOs of the concerned Units please Yours faithfli lly, Chief Accounts Officer, F&A W 'in~.~seb Ltd, LAShimla-4 ~. Copy ofabove forwarded to the fohowing for informat on and necessary action: 1. Executive Director (Personnel), HPSEBL, Vidyut Bhawan, Shimla-4 2. All the Dy. Chief Engineersl Superintending Engineers in the HPSEBL '3. All the Add\. Superintending Engineersl Sr. Executive Engineers in HPSEBL 4. All the Sr. AOs/AOs/AAOs in F&A W.in~ t'i..,,.,,na.:j- :10 up1va-d.:itt.r ~A.Jd1. c.-cje6 fn~~~~it) ~rr:.,;j;: 1.R. ~~.~ ~. S~ ern HPSEe.L we..bj.vk., / Chief Accounts Officer, F&A Wing ~IYSEB Ltd, Jhimla-4 C]}J -5