Home Case Index All Cases GST GST + HC GST - 2023 (6) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (6) TMI 93 - HC - GSTApplicability of GST Act - works contract commenced prior to 01.07.2017 and completed partially before 1.7.2017 or payment received partially before 1.7.2017 - Scope of the contract - inclusive of tax / exclusive of tax - jurisdiction of respondent Nos 4 to 8 to either issue notice or to take any coercive steps against the Petitioners under the provisions of the GST Act dated 01.07.2017 - constitutional validity of provisions of Section 7 (3) read with clause 6 of Schedule II of the GST Act - vires of Article 366 (12A), (26A) (29A) (b) & (f) the Constitution in view of and settled principles of law laid down by the Hon’ble Supreme Court regarding works contract. HELD THAT:- It is an undisputed fact that the Petitioners herein are class-I contractors who have entered into ‘works contract’ with various State Govt agencies and that the agreements were entered into at a point of time when the KVAT Act and Finance Act 1994 were in force. It is also not in dispute that the Petitioners are either covered under Composition scheme or regular VAT assessment and that on 01.07.2017 when the GST Act was implemented pan India, the said works contract was treated as “deemed service” and the Petitioners became liable to pay GST. It is this differential tax amount arising out of change in tax regime from VAT to GST which cast an additional tax burden on the Petitioners, which is the subject matter of the present petitions. There are considerable force in the submission made by the learned Senior counsel for the petitioners that the tax component is an independent component which the petitioners do not retain as a profit and is a statutory payment to be made; that looking into the nature of such payment of GST, the respondents/employers are required to honour the same after determining the differential tax burden, especially for the Petitioners who are before this court where “works contract” were entered prior to 01.07.2017 during KVAT regime and works are completed pre-GST but payments are made post-GST or Contracts entered prior to 01.07.2017 but partly executed pre-GST and balance work executed post-GST or Contracts for which tenders were invited during KVAT regime and finalised after 01.07.2017 under GST regime or contracts which were invited during KVAT regime under old schedule of rates (SR) but finalised under GST regime and that a certain procedure is required to be followed to determine the amount payable by or to the works contractors/Petitioners. Revenue authorities directed to determine the amount of VAT payable for the period prior to 1.7.2017 and GST payable for the subsequent period as per relevant VAT / GST law Petition disposed off with directions.
|