Government to Decide on GST Relief for Works Contracts

The Court directed the Principal Secretary, Public Works Department, Government of M.P., to decide on the petitioner's representation seeking relief for payment of GST amount on work executed post-GST implementation. The order required a speaking order to be issued within three months after providing a hearing opportunity, aiming to resolve the petitioner's grievance regarding the increased tax burden due to the lack of input tax credit for works contracts under GST.

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Issues:
1. Relief sought for payment of GST amount on work executed after GST implementation.
2. Ambiguity in payment of GST on works contracts executed prior to GST implementation.
3. Applicability of GST on works contracts and burden on contractors.

Analysis:
1. The petitioner sought relief for payment of GST amount of Rs. 13,80,802.00 on work executed post-GST implementation. The petitioner argued that after GST enforcement, they were subjected to additional GST burden, causing financial strain. The counsel highlighted the variance in tax rates between the VAT regime and GST, emphasizing the lack of input tax credit for works contracts under GST, leading to increased tax liabilities for the petitioner.

2. The petitioner raised concerns regarding the ambiguity in payment of GST on works contracts executed before GST implementation but continued post-GST. Reference was made to circulars and notifications issued by different states and the Central Government to address similar issues faced by contractors, aiming to mitigate the tax burden transition. The counsel emphasized the need for a clear policy to deal with such situations to prevent contractors from facing excessive tax liabilities.

3. The Court acknowledged the challenges faced by the petitioner and directed the Principal Secretary, Public Works Department, Government of M.P., to decide on the representation submitted by the petitioner. The order mandated a speaking order to be issued after providing a hearing opportunity within three months. This decision aimed to address the petitioner's grievance and ensure a fair resolution in light of the complexities surrounding GST applicability on works contracts.

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