2020 (11) TMI 186 - 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) - 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 the end of December, 2020. Petition disposed off.

Summary

Issues:
Challenge to non-reimbursement of differential tax amount post transition from VAT to GST, Praying to quash a specific clause in Finance Department Memorandum.

Analysis:
The petitioner challenged the failure to reimburse the differential tax amount resulting from the shift from Value Added Tax (VAT) to Goods and Service Tax (GST) from 01.07.2017. The main issue revolved around the contractors facing difficulties due to the change in the works contract regime under GST. The petitioner contended that the introduction of GST necessitated tax payments that were not anticipated at the agreement's inception.

The Additional Government Advocate cited a related case where revised guidelines were issued concerning works contract under GST. The revised guidelines specified the treatment of works contracts as a composite supply of service under GST, taxable at varying rates. The State Government revised the Schedule of Rates (SoR) to exclude taxes like Excise Duty, VAT, etc., post-GST implementation. Contractors were required to issue Tax Invoices separately showing the taxable work value and GST. For works initiated pre-GST but completed post-GST, a specific procedure was outlined to determine the payable amount to the contractor.

The judgment directed the petitioner to submit a comprehensive representation to the appropriate authority within a specified timeframe, following the revised guidelines issued by the Finance Department. The authority was mandated to consider and dispose of the representation promptly. The petitioner was granted the right to challenge the authority's decision if aggrieved. Additionally, no coercive action was to be taken against the petitioner until a specified date. The writ petition was disposed of accordingly, with any related interim applications also being resolved.

Given the ongoing COVID-19 pandemic, parties were advised to access the soft copy of the order from the High Court's official website for necessary proceedings, in line with the prescribed guidelines.