2025 (5) TMI 906 - HC - GST

Prayer for a direction upon the respondents not to impose or demand goods and service tax in respect of the first R.A. Bill raised by the petitioner in connection with the execution with the contract dated 14th March 2024 - HELD THAT - It is noted that since the nature of job covered under the contract is not exempted under the provisions of CGST/WBGST Act 2017 the petitioner cannot evade the liability to make payment of GST. However as per Sections 12 and 13 of the said Act the time of supply of goods and the time of supply of services has been specifically provided and it has also been indentified that the liability to pay tax on goods and services shall arise at the time of supply as determined in accordance with the provisions of Sections 12 and 13 of the said Act. Having regard thereto and having regard to the provisions contained in Section 31 of Sub-Sections (4) and (5) of Section 31 of the said Act though the obligation to file returns is with the petitioner however the municipality also cannot evade liability to make payment of GST if such GST is included in the invoices. This Court has however not gone into the issue as to whether the contract is a fixed rate contract and whether the tax component is required to be factored into the payment terms itself. It is for the parties to decide the same as per the contractual terms. At this stage there is no scope to grant any relief to the petitioner apart from the clarification as aforesaid being provided - Petition disposed off.

Summary

The Calcutta High Court addressed a writ petition seeking to restrain respondents from demanding GST on the petitioner's first R.A. Bill under a contract dated 14th March 2024. The petitioner contended that the BOQ rates were exclusive of GST, and thus, GST should not be imposed or pre-deposited as a condition for bill processing. The Court noted that the contract work is not exempt under the CGST/WBGST Act, 2017, and "the liability to pay tax on goods and services shall arise at the time of supply as determined in accordance with the provisions of Sections 12 and 13" of the Act. While the petitioner must file returns, the municipality cannot evade GST payment if included in invoices (per Section 31(4) and (5)). The Court declined to rule on whether the contract is fixed-rate or whether tax should be factored into payments, leaving that to the parties' contractual terms. Consequently, no substantive relief was granted, and the petition was disposed with clarification on GST liability principles.