2018 (12) TMI 1892 - HC - GST

Reimbursement of Differential tax - change in tax regime from Value Added Tax (VAT) to Goods and Service Tax (GST) with effect from 01.07.2017 - HELD THAT - The petitioner shall make a comprehensive representation before the appropriate authority within four weeks from today ventilating the grievance. If such a representation is filed the authority will consider and dispose of the same in the light of the aforesaid revised guidelines dated 10.12.2018 issued by the Finance Department Government of Odisha as expeditiously as possible preferably by 31.03.2019. No coercive action shall be taken against the petitioner till 31.03.2019 - petition disposed off.

Summary

Issues:
Challenge to action of opposite parties in not reimbursing differential tax amount due to change from VAT to GST; Praying to quash Clause 1(iii) of Finance Department Memorandum dated 07.12.2017.

Analysis:
The main issue in this case involves the challenge by the petitioner against the opposite parties for not reimbursing the differential tax amount arising from the transition from Value Added Tax (VAT) to Goods and Service Tax (GST) with effect from 01.07.2017. The petitioner has also sought to quash Clause 1(iii) of the Finance Department Memorandum dated 07.12.2017. The crux of the matter lies in the difficulty faced by contractors due to the change in the regime concerning works contracts under GST. The grievance put forth by the petitioner is that post the introduction of GST, they are required to pay taxes that were not initially anticipated when entering into agreements.

The Additional Counter Affidavit filed by the learned Addl. Government Advocate reveals that the Government has issued revised guidelines superseding the previous ones. These revised guidelines pertain to works contracts under GST and were issued by the Government of Odisha, Finance Department through an Office memorandum dated 10.12.2018. The revised guidelines address the concerns raised by contractors regarding additional amounts towards GST for works tendered before 01.07.2017 but executed partly or wholly after that date.

The revised guidelines under GST regime stipulate various procedures to determine the taxable value and GST for works contracts. Contractors are required to raise Tax Invoices clearly showing the taxable work value and GST separately. In cases where tenders were invited pre-GST but payments made post-GST implementation, specific procedures are outlined to ascertain the payable amount to contractors. These procedures include determining revised estimated work values, adjusting for tender premium/discount, and ensuring reimbursement or deduction based on revised GST-inclusive work values.

The judgment directs the petitioner to make a comprehensive representation before the appropriate authority within a specified timeline, ventilating their grievance in light of the revised guidelines issued by the Finance Department. The authority is mandated to consider and dispose of such representations promptly. The judgment also safeguards the petitioner from coercive actions until a certain date and provides the option to challenge the authority's decision if aggrieved. Ultimately, the writ petition is disposed of, along with any connected miscellaneous cases, in accordance with the outlined directives and guidelines.