2020 (3) TMI 1180 - HC - GST

Petitioner directed to comply with guidelines for GST transition reimbursement

The court directed the petitioner to submit a comprehensive representation to the appropriate authority within four weeks, following which the authority ... Non-reimbursement of differential tax amount - Scope the mutual agreement between the parties - situation post change in tax regime from Value Added Tax (VAT) to Goods and Service Tax (GST) with effect from 01.07.2017 - grievance of the petitioner is that in view of the introduction of the GST, petitioner is required to pay tax which was not envisaged while entering into the agreement - HELD THAT:- The petitioner shall make a comprehensive representation before the appropriate authority within four weeks from today ventilating the grievance. If such a representation is filed, the authority will consider and dispose of the same, in the light of the aforesaid revised guidelines dated 10.12.2018 issued by the Finance Department, Government of Odisha, as expeditiously as possible, preferably by 30.04.2020 - No coercive action shall be taken against the petitioner till 30.04.2020. Petition disposed off. Issues involved:Challenge to non-reimbursement of differential tax amount due to change from VAT to GST in works contract.Analysis:The petitioner challenged the opposite parties for not reimbursing the differential tax amount resulting from the transition from Value Added Tax (VAT) to Goods and Service Tax (GST) from 01.07.2017. The main issue revolves around the contractors facing difficulties due to the change in the tax regime concerning works contracts under GST. The petitioner's grievance is that post-GST implementation, they are required to pay taxes that were not anticipated during the agreement. The Additional Government Advocate informed about revised guidelines superseding the previous ones, issued by the Finance Department, Government of Odisha, addressing the concerns related to works contracts under GST.The revised guidelines specify that works contracts are treated as composite supply of service under GST, taxable at different rates depending on the nature of the contract. The Schedule of Rates (SoR) was revised to exclude taxes like Excise Duty, VAT, Entry Tax, Service Tax, etc., post-GST implementation. Contractors are now required to raise Tax Invoices separately showing the taxable work value and GST. Specific procedures were outlined for works contracts where tenders were invited before GST implementation but executed afterward, ensuring determination and adjustment of payable amounts to contractors based on revised estimates and GST rates.The guidelines also cover F2 contracts, providing instructions for determining taxable values under GST for each item of the balance work. Administrative Departments were directed to issue suitable instructions for the implementation of these revised guidelines. The court directed the petitioner to submit a comprehensive representation to the appropriate authority within four weeks, following which the authority would consider and dispose of the grievance in line with the revised guidelines issued by the Finance Department. The petitioner was granted the right to challenge the authority's decision if aggrieved, with a stay on coercive actions against the petitioner until the specified date.In conclusion, the writ petition was disposed of with the directive for the petitioner to follow the due process outlined in the revised guidelines for addressing the reimbursement issues related to the transition from VAT to GST in works contracts, ensuring a fair consideration of grievances by the competent authority.