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.
Manufacturer Faces Tax Rate Dilemma on 2017 Order After GST Implementation; Contract Clauses Could Affect Cost Allocation A manufacturer of welding machinery received an order from Western Railway in May 2017, with a CST rate of 6.05%. The goods are to be supplied in July 2017, after GST implementation, which sets the tax rate at 18%. The manufacturer inquired whether the purchaser must adjust the tax rate in the order. Respondents advised checking the contract for tax clauses and suggested that if the contract specifies taxes at the time of supply, it may require a revised agreement to reflect GST rates. Otherwise, the supplier may have to bear the cost difference. (AI Summary)
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