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2024 (6) TMI 283 - HC - GSTRejection of request made by the petitioner seeking reimbursement of GST paid by the petitioner - HELD THAT - Similar issue has already been dealt with by this Court in the case of Subaya Constructions Company Ltd. Vs. Commissioner of Municipal Administration Chennai 2019 (8) TMI 858 - MADRAS HIGH COURT wherein it is held the parties will now stand governed by paragraph 10(a) and paragraph 12 of aforesaid G.O.Ms.No.296 Finance Salaries Department dated 09.10.2017. - the respondent is directed to reimburse the GST amount paid by the petitioner for the works contract services to the respondent within a period of eight weeks from the date of receipt of copy of this order. Petition disposed off.
Issues:
Challenge to order rejecting reimbursement of GST paid by petitioner, interpretation of GST provisions in works contract services, applicability of Government orders on GST reimbursement. Analysis: The writ petition challenged the respondent's order rejecting the petitioner's request for reimbursement of GST paid. The petitioners are suppliers of works contract service registered under TNGST Act and CGST Act. They participated in tenders floated by the respondents through e-procurement system and became successful tenderers. The financial bid quoted by the petitioners must be inclusive of taxes and duties as per the Transparency in Tenders Rules. However, post-GST implementation, the contract value does not include GST, which must be separately shown in the tax invoice. The applicable GST rate for works contract services post 01.07.2017 is 12% under the GST enactments. The petitioners are obligated to raise invoices as per CGST/TNGST Act provisions and Government orders. Despite this, the respondents failed to discharge the GST liability for the works done by the petitioners as per the contract. The respondent rejected the petitioner's request based on the Special Conditions on Sales Tax, holding the petitioner responsible for sales tax levy on construction contracts. The respondents directed the petitioner to remit the total tax from the amount already paid, denying the petitioner's claim. However, the counter filed by some respondents revealed that contractors are eligible to receive GST amount after deducting the subsumed tax as per Government orders issued to ease the transition from VAT to GST. The Court referred to a previous case where a challenge to Government Order G.O.Ms.No.296 dated 09.10.2017 was dismissed, confirming its applicability. Paragraphs 10(a) and 12 of the Government Order specify the procedure for estimating subsumed tax and negotiating agreements with contractors post-GST implementation. The Court directed the respondent to reimburse the GST amount paid by the petitioner for works contract services within eight weeks. Similar directions were given for other writ petitions, with the parties required to furnish necessary documents for reimbursement. The writ petition was allowed, and other petitions were disposed of with no order as to costs.
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