TaxTMI 
TaxTMI 
2019 (7) TMI 1380
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....Kr. Verma, Asst. S.G. CORAM: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD ORAL JUDGMENT Heard learned counsel for the petitioners, learned counsel representing the State as well as learned Assistant Solicitor General representing the Union of India. All these writ applications are raising a common question as to the effect of coming into force of the Goods and Services Tax Act (hereinafter referred to as the "GST Act, 2017") in respect of the tenders which were floated prior to coming into force of the Act of 2017 and in respect thereof the agreement i.e. the Standard Bidding Document (in short the "SBD") applicable in the Works Departments of the Government of Bihar contains Clause 35 which deals with the condition of reimbursement of levy/taxes if levied after receipt of the tenders. Similar provision is there in the Model Bidding Document (in short 'MBD'). The petitioners moved this court stating that they had participated in the tender process prior to coming into force of the GST Act, 2017, when Bihar VAT Act, 2005 was in force and applicable in relation to the contracts in question. According to the petitioners, after coming into force of the GST Act, 2017 it was incumben....
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....days of the imposition of any such further tax or levy, pursuant to the Constitution (forty Sixth Amendment) Act, 1982, give a written notice thereof to the Engineer in Charge that the same is given pursuant to this condition, together with all necessary information relating thereto." In course of argument, Mr. Prabhat Ranjan, learned counsel representing the petitioner(s) submitted that till the date of filing of the writ application, the State Government had not provided for any mechanism to find out the amount payable as 'GST' on those works contract of the nature stated above, there was no mechanism as to who would be competent to deduct the amount payable under 'GST' and how the same shall be deposited in the government exchequer and would be refunded to the contractor and because of the inaction on the part of the government, the petitioners were required to deposit on recurring basis an amount of 12% on each and every bills without there being any stipulation as to how such amount so deposited shall be reimbursed. It is also contended that the inaction of the State Government has a material bearing on the profit of the contractor inasmuch as an amount of 10% of the net val....
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....taken this court through the counter affidavit filed in CWJC No. 1452/2019 on behalf of respondent Nos. 6 to 9. In this case, the issues raised by the petitioner are identical to the first writ application, however, it relates to an agreement which was executed after 01.07.2017 being 20/SBD-PMGSY of 2017-18 dated 28.08.2017 for a cost of Rs. 1,02,01,006.00 (rupees One Crore Two Lac One Thousand Six Only). Since the Module Bidding Document (in short 'MBD') in this case contains the same Clause 35 as appearing in the 'SBD', a similar contention has been raised on behalf of the petitioners. While answering the contentions raised on behalf of the petitioners, learned counsel for the State has relied upon the counter affidavit filed on behalf of respondent nos. 6 to 9 in CWJC No. 1452/2019. It is stated that all the provisions of the 'SBD' are part and parcel of the agreement. Clause 13.3 of the 'SBD' states that "All duties, taxes, royalties and other levies payable by the Contractor under the Contract, or for any other cause, shall be included in the rates, prices and total Bid price submitted by the Bidder." According to the respondents, the petitioner if had any objection with reg....
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....T), Empowered Officers/CEOs & Chief Engineers of SRRDAs, General Managers Finance (NEAs), (All State). Subject: Implementation of Goods and Service Tax-Works Contractor. Sir/Madam, 1. Government of India has enacted the Goods and Services Act 2017 through out India w.e.f. 01.07.2017. The GST has subsumed vaious indirect Taxes of both the Central & State Government, such as Central Excise Duty, Service Tax, Central Sales Tax (CST/Works Contract Tax (WCT)/State Value Added Tax (VAT), Additional Custom Duty (CVD) and special Additional Duty (SAD) apart from Entry Tax and Octroi Charges etc. 2. The Standard Bidding Document (SBD) makes provisions about the taxes which directly relating to Contract Value. It incorporates that whenever the tax structure is changed during the ongoing contract and new law comes into force then the contractor has to be refunded the increased amount of taxes, if any and similarly, recovery is to be made from the contractor if the taxes have decreased. 3. On request of various States, seeking clarifications of GST and issuance of guidelines for future references, this office in consultation with Integrated Finance Division (IFD) of Ministry of Rural....
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....the balance will be the value of taxes subsumed into GST such as Central Excise Duty and VAT i.e. GST component. vi. Therefore, the value of subsumed taxes under GST needs to be separated out from the contracted amount to arrive at the value of work. vii. The key issue is to estimate the value of subsumed tax carefully and as accurately as possible. For this purpose, an indicative Excel format is annexed for guidance. Model calculations are also attached herewith and states may workout similarly for all the ongoing works. Excel sheet indicates various project components which attract various types of taxes including ED, CST, VAT/WCT and other taxes which were already in the contract price as per the original contract. The same format can be used to compile the information for each ongoing project, taking into consideration the GST input tax credit available for the project. The assessment of subsumed shall be submitted by the contractor along with copies of invoices and statement of input taxes duly certified by a Chartered Accountant. It is responsibility of the contractor to furnish correct details of the subsumed taxes. viii. Once the value of work sanction and GST taxes a....
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....reements should provide for payment of value of works plus applicable GST. C. Category C i. In cases, where the sanctions have been obtained after 01.07.2017 and tenders are yet to be initiated, the rates to be quoted shall be exclusive of GST and GST of 12% will be added to the value offered by the bidders separately. ii. The SBD may be modified to the above extent. iii. The Bill of Quantities (BoQ) shall also reflect prices offered by the bidder without GST and applicable GST separately. iv. The States shall work out the departmental cost of the work without GST for the purpose of evaluation and comparison with rates offered by the bidders. D. Category D i. In cases of all new works to be proposed under PMGSY, the states shall prepare Schedule of Rate (SoR) after deducting the taxes subsumed under GST. ii. The Detailed Project Reports shall be prepared based on this revised SoR and the state may add 12% GST to cost of the work to arrive at the overall cost of the work. iii. In all such cases approval of SoR may be obtained from NRRDA as per existing practice. 6. Revision of Cost The States shall work out the impact of GST for all the works individually for a....
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....of this court towards the statements made in paragraph 11 & 12 of the counter affidavit, wherein it is stated that the 'GST' deduction by the Executive Engineer are deposited with the 'GST' authorities on behalf of the petitioners and due credit is given to the Contractors for the amount so deducted, therefore the petitioner can set off his liabilities from tax credit and if refund is due on the basis of the return filed it will be granted by the 'GST' authorities. It is submitted that the grievance of the petitioner has, thus, already been redressed and in fact it is the petitioner who has not taken an appropriate steps as per the provisions made in the preceeding paragraphs. It is also stated that the petitioners may contact the concerned Executive Engineer/ departmental Authorities with his claim in accordance with the provisions made in this regard as any action or proceeding for payment of differential amount cannot be initiated without presentation of the claim by the petitioners. On the last date when the matter was taken up for consideration this court recorded the submissions of the parties in the following terms: - "Re.: CWJC No. 2734 of 2019 A counter affidavit on b....
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....fidavit have been referred to and it is submitted that in fact there is no difficulty in redressal of the grievance of the petitioner. It is submitted that in the cases where the contract work has been executed after 01.07.2017 and the value to be paid comes to Rupees Two Lakhs and Fifty Thousand and odd, in that case, the payment is to be made after deduction of 1% CGST and 1% SGST with the supplier with effect from the date to be notified subsequently and for that reason the Commercial Taxes Department, Government of Bihar has come out with Notification dated 13.09.2018 published on 1st day of October, 2018. The said Notification is in terms of Section 51 of the GST Act. As regards the reimbursement of tax liabilities arising due to enactment of GST Act, it is stated that the said Act has elaborately dealt with the issue and directions have been issued to the Executive Engineers to entertain the claim of the petitioner and other contractors in the light of the aforesaid circulars and guidelines. In course of argument, certain submissions have been made based on the Schedule of Rate (SOR). Copy of the SOR is, however, not on the record, and, therefore, it has been agreed at th....