GST on supplies to Indian Railways for orders received before 01.07.2017

[Guest]

We are manufacturer of Welding Machinery. We received an order from COS, Western Railway, Mumbai in May 2017. The rate of CST chargeable was 6.05%. The material against this order is going to be supplied in July 2017. Now with the implementation of GST, the rate of tax is 18%.

Is there any provision in the GST Act regarding this matter, wherein the purchaser, that is, The Western Railway, has to automatically change the rate of tax in its order?

Please provide information. Thank you.

[MUKUND THAKKAR]

please refer your contract. if clause is there for taxes and duties specify,than you have to take fresh order with present applicable taxes and duties. other wise it will cost to you.

[KASTURI SETHI]

I support the views of Sh.Mukund Thakkar, Sir. Any contract cannot be executed beyond the letter and spirit of present law (GST). Agreement has to be revised in view of implementation of GST Act.

[Ramesh Kothari]

Do u hv mentioned the tax clause as applicable at prevailing rate at the time of supply of material if not u hv to supply at current rate of GST there is no provision GST

What the railway people says r they stick to get supply at the rate 6.05%

If possible get amended the Agreement

 

[KASTURI SETHI]

Sh.Romesh Kothari Ji,. You are welcome in this forum. Relished your replies. Your entry will improve the quality of replies to queries.

[KASTURI SETHI]

Sh.Kothari Ji, I am interested in your profile. Pl. Upload.

AI Summary

GST transition and contract tax clause determine which tax rate applies to supplies delivered after tax reform implementation. Whether the tax rate for supplies ordered before GST implementation but delivered afterwards is governed by the contract depends on the contract's tax clause-whether taxes were fixed, tied to the rate at time of supply, or allocate change-in-law risk-and, absent an express provision, parties should seek an amended order or revised agreement to reflect the applicable tax regime at time of supply.