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2021 (3) TMI 1131 - HC - GSTValidity of non reversal 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 1st July, 2017 - difficulty faced by the contractors due to change in the regime regarding works contract under GST - 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 7th December, 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 10th December, 2018. 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 10th December, 2018 issued by the Finance Department, Government of Odisha, as expeditiously as possible, preferably by 26th March, 2021 - petition disposed off.
Issues:
Challenge to non-reimbursement of differential tax amount due to change from VAT to GST in works contract. Analysis: The main issue in this case pertains to the challenge 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) effective from 1st July 2017. The Petitioner, along with other contractors, faced difficulties due to the change in the tax regime under GST concerning works contracts. The grievance highlighted was that the Petitioner had to pay taxes that were not initially anticipated when entering into agreements due to the introduction of GST. The Government responded by issuing revised guidelines superseding the previous ones, addressing the concerns raised by contractors regarding additional GST amounts for works tendered before 1st July 2017 but executed after that date. The revised guidelines outlined the treatment of works contracts under GST, specifying the taxable rates at 18%, 12%, or 5% based on the nature of the contract. It also detailed the process for determining the revised work values post-GST implementation, including the exclusion of various taxes from estimates and the addition of GST at the appropriate rate. The Court directed the Petitioner to submit a comprehensive representation to the appropriate authority within four weeks, following which the authority would review and resolve the grievance in line with the revised guidelines issued by the Finance Department of Odisha. The authority was instructed to expedite the process and provide a decision preferably by 26th March 2021. The Petitioner was granted the right to challenge the authority's decision if aggrieved, and no coercive action was permitted against the Petitioner until the specified date. The writ petition was disposed of accordingly, leading to the disposal of connected cases as well, with an urgent certified copy of the order to be issued as per rules.
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