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TMI Blog2023 (11) TMI 1369X X X X Extracts X X X X X X X X Extracts X X X X ..... tion contract value offered by him inclusive of taxes as existing on the last date for submission of bids. It was further stipulated that if subsequently there is a reduction in the rate of tax, the contractor will reimburse the respondents to the extent of reduction and in case of increase, the amount to the extent of increase in the tax would be paid by the respondents to the contractor i.e the petitioner herein. 3 It is virtually not in dispute that, at the time of submission of bid by the petitioner, the rate of service tax under the J&K Goods and Services Tax Act, 2017 ["the Act of 2017"] and the rules framed thereunder was 18% and it was the same rate that was prevailing on the last date for submission of bids. The rate of service tax, however, was subsequently reduced to 12%. It is on account of this reduction in the rate of tax, the petitioner-company was put no notice for recovery of differential amount of tax which was payable by the petitioner to the respondents as per the terms and conditions of the contract agreement 4 The petitioner-company, feeling aggrieved of slapping of recovery notices, approached this Court by way of WP(C) No. 2183/2019 which along with other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o them was included in the offer made by them. 5. The grievance raised by the petitioners is not that the amount of tax which has been reduced after the last date for submission of the tenders is not reimbursable by them. Only issue sought to be raised is that the demand notices have been issued without hearing the petitioners and the amount has been calculated unilaterally. The petitioners should have been afforded an opportunity of hearing so as to enable them to point out that the amount of tax as demanded from them is not due even after the reduction of the rates, if calculated properly. The liability is not in dispute. It is only the quantum". (underlined by us) 9 We are, however, surprised to find that the petitioner, despite having earned a clear finding against it in respect of its liability to pay the differential amount of service tax, has yet again raised the same dispute as was raised in WP(C) No. 2183/2019. The entire petition is edified on the ground that the rate of service tax which was quoted by the petitioner while submitting its bid was only 12% and not 18%. It is submitted that the petitioner included in the rates the service tax at the rate of 12% in view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (including sales tax/VAT on materials, sales tax/VAT on works contractors, turnover tax, service tax, labour welfare cess/tax etc), Duties, Royalties, Octroi and other levies payable under the respective statues. No reimbursements/refund for variation in rates of taxes, duties, royalties, octroi and other levies shall be made except as provided in sub para (b) hereinbelow. 49.2. The taxes which are levied by Government at certain percentage rates of contract sum/amount shall be termed as "taxes directly related to contract value" such as sale tax/VAT on works contracts, turnover tax, labour welfare cess/tax and like but excluding income tax. The tendered rates shall be deemed to be inclusive of all "taxes directly related to contract value" with existing percentage rates as prevailing on last due date for receipt of tenders. Any increase in percentage rates of "taxes directly related to contract value" with reference to prevailing rates on last due date for receipt of tenders shall be reimbursed to the contractor and any decrease in percentage rate of "taxes directly related to contract value with reference to prevailing rates on last due date for receipt of tenders shall be refu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Act of 2017 and the rules framed thereunder was 18%. It is this rate which shall be deemed to have been taken into account by the petitioner while submitting the bid. 15 True it is that on the last date fixed for receipt of tenders, GST Council in its 20th meeting held on 05.08.2017, had taken a decision to reduce the service tax on works contract from 18% to 12%. 16 Needless to say that the decisions of the GST Council are in the shape of recommendations and do not have any statutory flavor. It is only when these recommendations are accepted by the Government and the rules framed under the Act of 2017 are appropriately amended, there could be variation in the rates of goods and service tax formally affected. 17 In the instant case, the Government issued SRO-GST-06 (Rate) on 21.09.2017 in exercise of powers conferred by subsection (1) of Section 9, subsection (1 ) of Section 11, subsection (5) of Section 15 and subsection (1) of Section 15 of the Act of 2017 and made amendments in SRO-GST-2 (Rate) notification dated 22.08.2017 and reduced the rate of service tax on the works contract from 18% to 12%. 18 From a reading of SRO dated 21.09.2017, it clearly transpires th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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