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2019 (9) TMI 266 - HC - GSTLevy of GST - Works contract - situation prior to GST regime - applicability of G.O.Ms.No.296, Finance Salaries Department, dated 09.10.2017- HELD THAT - There is no disputation that paragraph 10(a) is applicable up to 30.06.2017 and paragraph 12 is applicable post 30.06.2017 i.e., on and from 01.07.2017. Parties hereto will now stand governed by paragraph 10(a) and paragraph 12 of aforesaid G.O.Ms.No.296, Finance Salaries Department, dated 09.10.2017 - The exercise of quantification qua para 10(a) shall be completed by both the parties as expeditiously as possible and in any event within 12 weeks from the date of receipt of a copy of this order - petition disposed off.
Issues:
1. Contract for providing under ground Sewerage system 2. Payment of Goods and Service Tax (GST) under Central Goods and Services Tax Act, 2017 3. Applicability of G.O.Ms.No.296, Finance [Salaries] Department, dated 09.10.2017 Analysis: Issue 1: Contract for providing under ground Sewerage system The subject matter of the writ petitions involved a contract between the second respondent, Salem City Municipal Corporation, and the writ petitioner company for providing an under ground Sewerage system. The contract dated 23.01.2015 did not include provisions for the payment of Goods and Service Tax (GST) as it predated the GST regime that became operational on 01.07.2017. The writ petitioner raised concerns regarding the liability to pay GST as the work under the contract was in progress. The tax liability for the contract was determined to be 12% under the relevant entry for 'Construction Services.' Issue 2: Payment of Goods and Service Tax (GST) under Central Goods and Services Tax Act, 2017 The primary dispute in the writ petitions was the payment of GST on the contract value. The writ petitioner sought a direction for respondents 1 and 2 to pay the difference of 10% GST on the original agreed contract value to align with the tax liability under the law that was operational during the contract execution. The Court acknowledged the 12% tax liability for the contract and emphasized the need to resolve the tax liability concerning GST payment. Issue 3: Applicability of G.O.Ms.No.296, Finance [Salaries] Department, dated 09.10.2017 The judgment referred to Government Order G.O.Ms.No.296 issued by the Government of Tamil Nadu, which fixed the GST on works contracts for Government work at 12%. The history of this order, including legal challenges and subsequent judgments, was outlined to establish the applicability of specific paragraphs of the Government Order. Paragraphs 10(a) and 12 of G.O.Ms.No.296 were identified as relevant for determining the tax liability and payment procedure post the GST regime implementation. In conclusion, the High Court disposed of the writ petition based on a common order dated 01.08.2019, which addressed similar issues regarding GST payment in contracts pre and post the GST regime. The judgment provided specific directions for quantification of tax liability under the relevant Government Order and emphasized the need for expedited resolution while ensuring the continuation of work under the contract without impediment.
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