The two member bench of the Authority for Advance Ruling ( AAR ) Karnataka, observed that question of Goods and Service Tax ( GST ) on Revenue Sharing does not arise when Tax Invoice is issued by Supporting Bidder of Contract
The applicant was a Limited Liability Partnership concern registered under the provisions of Central Goods and Services Tax Act, 2017 as well as Karnataka Goods and Services Tax Act, 2017 ( hereinafter referred to as the CGST Act and KGST/SGST Act respectively ). The applicant is providing architectural and structural design consultancy services.
The applicant stated that they are providing architectural and structural design consultancy services. They have secured the design consultancy project while bidding jointly with another partner M/s. Grant Thornton Bharat, a LLP to provide services to Tiruchirappalli City Corporation. The project is for a bus terminal, vegetable market, wholesale market, and truck terminal and infrastructure structure.
Further stated that their partner M/s. Grant Thornton Bharat is the lead member and collects the fee on behalf of all the partners. The mode of payment from their client in Tiruchirappalli City Corporation was to one of the partners who must proportionately share the revenue between other partner/s.
The applicant viewed that the rate of GST applicable on revenue sharing between joint bidders / partners for a particular project must be the same as was applicable to the client.
The tribunal comprising Dr. M.P.Ravi Prasad and Kiran Reddy. T observed that the Applicant cannot consider the GST at the rate as applicable to the client. The exemption of GST was not applicable to the Applicant.
The AAR concluded that the Advance ruling cannot be given on assumed scenarios in the absence of relevant documents.
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