9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (10) TMI 370 - HC - GSTReimbursement of GST - Scope of the terms of the Contract - Seeking directions for payment of interest on tax dues at 18% per annum being the statutory interest rate chargeable under Section 50 of the CGST Act, 2017 - whether GST is required to be made good to the contractor as it was only 5% of the VAT which was provided for in the contract? - HELD THAT - The Karnataka Urban Water Supply and Sewerage Board had sought for a clarification relating to implementation of GST in relation to performance of portions of contract after coming into force of GST. The Finance Department by its clarification dated 14.12.2020 has also opined that the tax difference ought to be calculated on each of the works and necessary steps to be taken to decide as to whether contract agreement needs to be changed. While making such clarification, the nature of reconciliation of tax paid in the pre-GST regime as well as taxes as applicable relating to all taxes in post-GST regime has been taken note of - This clarification made in the context of an authority set up under a statute and taking note of the clarification made by the KUIDFC, the respondent is required to act in terms of the clarification made. Further, insofar as tax component is concerned, as the contracts were entered after coming into force of the GST Act, and in light of the opinion expressed by a clarification made on 03.01.2020, the respondent is required to make good the GST after adjusting the amounts of sales tax that was provided for in the contract entered into between the petitioner and the respondent. The respondent is required to honour the same in terms of the clarification dated 03.01.2020. The consideration by the respondent to be made within a period of not later than twelve weeks from the date of release of the order - Petition disposed off.
Issues:
1. Reimbursement of GST amount to the petitioner. 2. Payment of interest on tax dues at 18% per annum. 3. Clarification on tax calculation for pre-GST and post-GST periods. 4. Dispute resolution clause in contracts. 5. Implementation of GST in contracts after GST Act came into force. 6. Calculation of tax difference on works post-GST implementation. Analysis: 1. The petitioner sought a writ for reimbursement of ?42,01,582 GST amount and interest at 18% per annum. The petitioner was awarded a contract after the GST Act came into force, with rates including a sales tax component. The petitioner made necessary GST payments and requested reimbursement from the respondent, supported by representations and clarifications from relevant authorities. 2. The respondent sought clarification from the Karnataka Urban Infrastructure Development and Finance Corporation (KUIDFC) regarding GST payment to the petitioner. KUIDFC provided a detailed procedure for tax calculation for pre-GST and post-GST periods, emphasizing the need to adjust sales tax amounts provided in contracts and make good the GST payment to the contractor. 3. The KUIDFC's clarification on tax calculation was clear and supported by the Finance Department's opinion on reconciling tax differences in pre-GST and post-GST regimes. The respondent was directed to act in accordance with these clarifications, ensuring the payment of GST to the petitioner after adjusting sales tax amounts as per the contract terms. 4. Despite contentions regarding dispute resolution clauses in contracts, the court emphasized the statutory nature of GST payments, requiring the respondent to honor the reimbursement of GST to the petitioner within twelve weeks from the date of the order. The judgment was made considering the independent and statutory nature of the tax component paid by the petitioner. 5. The judgment highlighted the importance of implementing GST in contracts entered into after the GST Act came into force. It emphasized the need for the respondent to calculate and reconcile tax differences for works performed post-GST implementation, ensuring compliance with statutory requirements and contract terms. 6. In conclusion, the petition was disposed of, with the court directing the respondent to reimburse the petitioner for the GST amount after adjusting sales tax components as per the contract terms and relevant clarifications provided by KUIDFC and the Finance Department. The judgment underscored the statutory obligation of the respondent to honor the GST payment to the petitioner within the specified timeframe.
|
