GST reimbursement for works contractors upheld under transition rules and applicable Government Order framework.

Works contractors engaged around the GST transition were treated as entitled to reimbursement of GST paid on works contract services, because the contractual adjustment had to be worked out under the applicable Government Order and tender conditions. The framework required the procuring authorities to identify the tax already subsumed, apply GST separately after 01.07.2017, and compute the revised agreement value and final bill payment accordingly. The claim was treated as one arising from the governing contractual and governmental regime, not as a barred demand for extra consideration, and the respondents were directed to process and pay the GST reimbursement in line with that framework.

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Issues: Whether the petitioners, being works contractors under contracts entered into around the transition to GST, were entitled to reimbursement of GST paid by them and whether the procuring authorities were bound to compute and pay such amount in accordance with the applicable Government Order and GST regime.

Analysis: The contractual and tender framework required examination of the post-GST position under the tender conditions and the Government Order governing transition from value added tax to GST. The Court relied on the earlier view that the relevant Government Order continued to operate and that the contractual adjustment had to be made by identifying the subsumed tax and adding GST as applicable. It noted that, after 01.07.2017, GST was separately leviable and that the parties had to proceed on the basis of the applicable clauses of the Government Order, including the mechanism for fixing revised agreement value and payment of final bills. The Court therefore treated the claim for reimbursement as one arising from the applicable contractual and governmental framework rather than as a barred claim for extra consideration.

Conclusion: The petitioners were held entitled to reimbursement of GST paid by them for the works contract services, and the respondents were directed to process and pay the amount in accordance with the applicable Government Order.

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