GST Advance Ruling on Pre-GST Contracts: Woodkraft India Limited
The Authority for Advance Ruling declined to rule on pre-GST contract payments because they do not involve current or future supplies.
- Ruling
- GST-ARA-24/2019-20/B-35, dated 17/03/2020
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Woodkraft India Limited asked about GST on payments for completed pre-GST work.
- The Authority for Advance Ruling rejected the application as non-maintainable.
- The law limits advance rulings to current or proposed supplies of services.
In short
The company asked the Authority for Advance Ruling (AAR) if they owed GST on payments received for civil work finished before the GST law started. The AAR refused to answer, stating that their power only covers services happening now or planned for the future, not work completed in the past.
What has changed
How it worked before
Businesses often sought clarity from the AAR on how to handle old invoices or pending payments from contracts that spanned the transition to GST.
What has changed
The authority decided it has no jurisdiction over completed pre-GST contracts. This means if your dispute involves work finished before July 1, 2017, the AAR will not provide a decision on whether GST applies.
Who this affects
Businesses with pending payments, reimbursements, or disputes related to construction or service contracts completed before the GST regime began.
An example
Imagine a construction firm, BuildRight, that finished a project in 2016 but is only now receiving a final payment. BuildRight asks the AAR if they must pay GST on this late payment. Based on this ruling, the AAR would likely tell BuildRight that they cannot answer the question because the work was completed before GST existed.
What you should do
If you have a similar issue, do not assume this ruling settles your tax liability. An advance ruling only binds the specific business that asked and its own tax officer. You should consult a tax professional to determine your liability based on the specific transition provisions of the GST law.
If you do nothing
If you assume this ruling exempts you from tax and you stop reporting or paying, you risk penalties and interest if your local tax officer disagrees. A ruling that is not yours provides no legal protection. You could face a tax demand that is difficult to challenge without a formal, specific ruling or legal advice.
The terms explained
- Advance Ruling
- A formal decision provided by tax authorities to a business to clarify how GST laws apply to their specific transactions.
- Jurisdiction
- The legal authority or power of a body, like the AAR, to hear a case and make a decision.
- Non-maintainable
- A legal term meaning the application does not meet the requirements to be heard or decided by the authority.
The ruling in detail
Authority for Advance Ruling
WOODKRAFT INDIA LIMITED
GST-ARA-24/2019-20/B-35, dated 17/03/2020 · Maharashtra
Questions before the authority
- Whether in the facts & circumstances of case, applicant is liable to pay GST in respect of Tax Invoice No 01 dated 25/06/2018 / R.A. Bill No 22 for Rs. 2,42,09,594/-, toward civil and interior work done of M/s Oil & Natural Gas Corporation Ltd. under provision CGST ACT.
- If the ruling on above question is affirmative, kindly clarify rate of tax applicable thereon.
- Whether in the facts and circumstances of case, applicant is liable to pay GST on proposed reimbursement of Rs. 1,92,50,247/- from M/s Oil & Natural Gas Corporation Ltd., toward operational site expenses and claim toward rectification of water damages, pertaining to original civil & interior work contract awarded by M/s Oil & Natural Gas Corporation Ltd.
- If the ruling on above question is affirmative, kindly clarify rate of tax applicable thereon.
Facts
The applicant executed a civil and interior works contract for ONGC that was completed in the pre-GST era. Following a dispute regarding delays and damages, an Outside Expert Committee recommended payments to the applicant for operational site expenses and rectification of water damages. The applicant sought an advance ruling on whether GST is applicable to the final bill raised in 2018 and the additional reimbursements recommended by the committee.
Ruling
| Question | What the authority ruled |
|---|---|
| Liability on Tax Invoice No 01 / R.A. Bill No 22 | Non-maintainable The work was completed in the pre-GST era. |
| Rate of tax for R.A. Bill No 22 | Non-maintainable Question not answered as the primary question was non-maintainable. |
| Liability on reimbursement of Rs. 1,92,50,247/- | Non-maintainable The services were rendered during the service tax regime. |
| Rate of tax for reimbursement | Non-maintainable Question not answered as the primary question was non-maintainable. |
The Authority for Advance Ruling determined that all four questions raised by the applicant are non-maintainable. It concluded that the services were rendered and completed during the pre-GST regime, and the claims do not pertain to the supply of goods or services being undertaken or proposed to be undertaken after the appointed day. Consequently, the authority declined to provide a ruling on the merits of the taxability or rates.
Reasoning
The Authority relied on Section 95 of the CGST Act, which limits the scope of advance rulings to matters concerning the supply of goods or services being undertaken or proposed to be undertaken. It observed that the applicant's work was completed prior to the appointed day (01/07/2017) and the invoices related to pre-GST contracts. Therefore, the authority held that the questions fall outside its jurisdiction as they do not involve current or future supplies under the GST regime.
Provisions relied on
- Section 95 of the CGST Act
- Section 97 of the CGST Act
- Section 142(2)(a) of the CGST Act
- Section 142(11)(b) of the CGST Act
For the practitioner
This ruling serves as a reminder that the AAR will **decline jurisdiction** over disputes involving services fully rendered and completed in the pre-GST era. Practitioners should note that the AAR will not adjudicate on the taxability of invoices or claims that do not relate to ongoing or future supplies under the GST framework. It does not provide a precedent on the substantive taxability of such claims, only on the **procedural limitation** of the forum.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/mah_aar_24_2019-20_b-35_17.03.2020_wil.pdf
Legibility of the scan, as read: high.
Prepared 20-10-2026.
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