Gew (India) Pvt. Ltd. – 2022 (56) G.S.T.L. 109 (A.A.R. – GST – Karnataka)

No need to take separate registration in case of supply of works contract services outside the state.

Facts– In this case, the applicant is a company who got a sub-contract work from M/s. L&T, claimed to be a works contract, for erecting steel structure casted and bolted on ground in the civil foundation, at the site at Karwar, Karnataka.

Issue: Whether the applicant need to obtain separate registration in the state of Karnataka, where supply of service has been made. Also, whether the applicant need to obtain ISD registration for the site at which they are delivering services.

Held: AAR held that the applicant has only one principal place of business which is in Noida, Uttar Pradesh for which registration has been obtained. Further, he neither having nor intending to have any other fixed establishment other than the principal place of business. Therefore, the location of the supplier itself is the principal place of business which is in Noida, Uttar Pradesh. Thus, there is no requirement for a separate registration in Karnataka for execution of works contract in the state of Karnataka. Hence, the nature of supply is of inter-State supply and the applicant can supply the impugned services from the place of registration i.e. Noida, UP on raising the invoice from the said place by charging IGST.

The definition under Section 2(61) of the CGST Act 2017, states that the Input Service Distributor is an office of the supplier of goods or services or both which receives tax invoices issued under Section 31 towards the receipt of input services and issues a prescribed document for the purposes of distributing the credit (ITC). Thus, to distribute the ITC, the supplier should obtain the Input Service Distributor registration for the premises from where they intend to distribute the credit. It is an admitted fact that the applicant neither have nor intend to have any establishment at the site at Karwar, Karnataka and hence cannot obtain the ISD registration.

Further in this case, AAR held that the Applicant are not entitled to take Input Service Distributor (“ISD”) registration for the site at which they are delivering service as they are not having nor intending to have any establishment at the site i.e., Karnataka.

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