2021 (1) TMI 422

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....ll as, Rural Engineering Department, Farrukhabad (R.E.D.), under the Pradhan Mantri Gram Sadak Yojana (PMGSY) to execute the work of civil construction of road and maintenance thereof. The contract was awarded before enactment of Goods and Services Tax Act, 2017 (GST Act) on 1 July 2017. Before the enactment of GST Act, the tax was levied at source at 4% of contract value under the Value Added Tax Act, 2008 (VAT Act). After the enactment of GST Act, the indirect tax was subsumed in the GST and the rate was revised at 12% of the contract value. The GST Act provides that every registered company/firm is entitled to Input Tax Credit (ITC) on purchase of goods and services which can be set off against the tax liability on the sale of goods and ....

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.... value of the work after deducting 4% VAT at source, however, post GST, the opposite party disbursed the amount on the value of the remaining work without deducting 4% VAT. In this backdrop, it is submitted that applicant applied for reimbursement of the additional tax equivalent to 8% on the value of remaining work for the increased tax component (GST at 12%) but the opposite parties delayed the reimbursement of the additional tax, consequently, applicant was left with no option but to deposit 12% GST including additional tax at 8% on the value of the work after setting off ITC to the State Government in order to avoid penal interest under the GST Act. The grievance of the applicant company is that despite deposit of GST from its own....

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.... due to the applicant. It is submitted that the applicant-company is entitled to Rs. 39 lakh. The approach adopted by the opposite party no. 2 in withholding the amount and not crediting the tax component with the applicant/company after receiving the amount from the opposite party no. 1, is not conducive for the company to work without the requisite capital. It is not disputed that the tax liability has been deposited by the company but the company has not been reimbursed the sum due from the opposite party no. 2 despite the funds being released by the opposite party no. 1 Learned counsel for the opposite party no. 1 submits that the Nodal Agency, Chief Executive Officer, U.P. Rural Road Development Authority, had twice reimbursed....