2023 (8) TMI 305 - HC - GST

Enhancement in the rate of GST - Government has however not acted upon pursuant to the changes in the rate of GST - HELD THAT - The case of the petitioner appears to be genuine, as the petitioner cannot be mulct with higher rate of tax for the work/supply of work to the respondent/Department, GST being an indirect tax, the incidence of tax has to be borne by the recipient. There shall be a direction to the first respondent to pass appropriate orders for making suitable budget allocation for reimbursing the petitioner and other contractors the GST for the difference in GST rate on account of increase in the rate. The differential amount of GST on account of increase rate of tax with effect from 18.07.2022 shall be paid. This exercise shall be carried out by the respondents particularly the first respondent within a period of 45 days from the date of receipt of a copy of this order. Petition allowed.

Summary

Issues involved: Contractual dispute regarding GST rate change and reimbursement.

Summary:
The petitioner, a contractor of the State Highways Department, entered into a contract with the government when the GST rate was 12%, which was later increased to 18%. The government did not act upon the change in GST rate, despite the petitioner's representations. The petitioner sought reimbursement for the increased GST rate for works executed after the rate change. The court found the petitioner's claim genuine, stating that the burden of the increased tax rate should be borne by the recipient. The court directed the government to allocate a budget for reimbursing the petitioner and other contractors the differential amount of GST due to the rate increase. The government was ordered to make the payment within 45 days, failing which the petitioner would be entitled to file a suit for recovery. The writ petition was allowed with no costs.