2020 (9) TMI 213 - HC - GST

Reimbursement of differential tax amount arising out of change in tax regime from Value Added Tax (VAT) to Goods and Service Tax (GST) with effect from 01.07.2017 - grievance of the petitioner is that in view of the introduction of the GST, petitioner is required to pay tax which was not envisaged while entering into the agreement - HELD THAT - The Government has now come out with a revised guidelines in this respect in supersession of the guidelines issued vide Finance Department letter dated 07.12.2017. He has filed Additional Counter Affidavit of O.P.-authority in similar cases annexing the revised guidelines relating to works contract under GST issued by the Government of Odisha, Finance Department vide Office memorandum No. FIN-CTI-TAX-0045-2017/38535/F Dated 10.12.2018. In that view of the matter, 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 21.10.2020 - No coercive action shall be taken against the petitioner till 21.10.2020. Petition disposed off.

Summary

Issues involved:
Challenge to non-reimbursement of differential tax amount due to change from VAT to GST regime in works contract.

Analysis:
The petitioner challenged the opposite parties for not reimbursing the differential tax amount resulting from the shift in tax regime from Value Added Tax (VAT) to Goods and Service Tax (GST) effective from 01.07.2017. The main issue highlighted was the difficulty faced by contractors due to this transition, especially in works contract under GST. The petitioner contended that the introduction of GST required them to pay taxes that were not initially foreseen when entering into agreements. The Government responded by issuing revised guidelines superseding previous ones, specifying the treatment of works contracts under GST. These guidelines outlined the taxation rates under GST, the exclusion of taxes from previous schedules, the necessity for contractors to raise tax invoices separately showing taxable work value and GST, and the procedure for determining amounts payable to contractors for works done before and after the GST implementation date.

In light of the revised guidelines, the court directed the petitioner to submit a comprehensive representation to the appropriate authority within four weeks, detailing their grievances. The authority was instructed to consider and dispose of the representation based on the revised guidelines by a specified date. The petitioner was granted the right to challenge the authority's decision if aggrieved, and no coercive action was to be taken against the petitioner until the specified date. The writ petition was disposed of accordingly, and all connected cases were also disposed of. Additionally, due to the ongoing COVID-19 lockdown, the court allowed the use of the soft copy of the order available on the High Court's website for reference.