Works-contract GST liability under transitional government instructions applies to ongoing contracts, with tax quantification to be completed promptly.

An ongoing works contract that began before GST but continued after GST came into force was treated as governed by the applicable Government Order on works-contract GST. Because the applicable tax rate was not disputed, the dispute was confined to how liability should be borne and quantified. The text states that paragraph 10(a) and paragraph 12 of G.O.Ms.No.296, Finance [Salaries] Department dated 09.10.2017, applied to such contracts, and that quantification was to be completed expeditiously without affecting the ongoing work.

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Issues: Whether the GST liability on an ongoing works contract entered into before the GST regime was to be worked out under the applicable Government Order, and whether the parties were to be governed by paragraph 10(a) and paragraph 12 of G.O.Ms.No.296, Finance [Salaries] Department dated 09.10.2017.

Analysis: The contract predated the GST regime, but the work continued after GST came into force and the applicable rate of tax was not in dispute. The dispute, therefore, was confined to the manner in which the tax liability was to be borne and quantified. The earlier Government Order fixing the GST treatment for works contracts was already operating, and the later Government Order, together with its paragraph 10(a) and paragraph 12, was treated as governing contracts of this nature. On that basis, the Court directed that the parties would stand governed by those clauses and that quantification should be completed expeditiously.

Conclusion: The issue was answered in favour of applying paragraph 10(a) and paragraph 12 of G.O.Ms.No.296, Finance [Salaries] Department dated 09.10.2017, with the tax quantification exercise to be completed within the time fixed by the Court.

Final Conclusion: The writ petition was disposed of by directing adherence to the applicable Government Order for works-contract GST and by requiring timely quantification without impeding the ongoing work.

Ratio Decidendi: Where an ongoing works contract spans the transition to GST and the applicable tax regime is undisputed, the liability is to be determined in accordance with the governing governmental instructions applicable to such contracts, and the parties may be directed to complete quantification under those instructions.

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