TMI Blog2019 (7) TMI 1380X X X X Extracts X X X X X X X X Extracts X X X X ..... for the petitioners has reiterated before this court that his grievance is limited to payability of the differential amount, if any, arising out of and by virtue of implementation of the GST . It has been shown that the grievance of the petitioners had in fact been redressed, learned counsel for the petitioners has agreed at the bar that if Clause (vii) of the minutes of the meeting of the Rural Works Department is followed by all other works department of the Government of Bihar, the grievance of the petitioners shall be taken to have been redressed. This court is of the considered opinion that now nothing remains for adjudication by this court as the grievance of the petitioners as framed in these writ applications are to be taken to have been redressed - application disposed off. - Civil Writ Jurisdiction Case No.1452 of 2019, 2734 of 2019, 2857 of 2019, 1453 of 2019, 4529 of 2018, 3288 of 2019, 3316 of 2019, 8068 of 2019, 8205 of 2019, 8214 of 2019 - - - Dated:- 5-7-2019 - Mr. Justice Rajeev Ranjan Prasad For the Petitioners : Mr.Prabhat Ranjan, Advocate, Mr. Chandan Kumar, Advocate For the Respondent/s : Ms.Archana Meena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntracts in which the estimates were prepared prior to 01.07.2017 but the agreements were executed after 01.07.2017 and yet there are contracts in which both the estimates prepared and agreements have been executed after 01.07.2017 and in order to meet the requirement of the GST Act, 2017 in its terms and spirit Clause 35 was required to be amended suitably. Before further dealing with the contentions, it would be just and proper to quote relevant Clause 35 of the Standard Bidding Document (in short SBD ) prevailing on 01.07.2017 which reads as under : - 35. Conditions for reimbursement of Levy/taxes if levied after receipt of tenders. (i) All tendered rates shall be inclusive of all taxes and levies payable under respective statutes. However, pursuant to the Constitution (46th Amendment) Act, 1982, if any further tax or levy is imposed by Statute, after the last stipulated date for the receipt of tender including extensions if any and the contractor thereupon necessarily and properly pays such taxes/levies the contractor shall be reimbursed the amount so paid, provided such payments, if any, is not, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not accorded the concurrence as yet. It is, thus, his submission that this court should issue a direction to the respondents to delete Clause 35 and a consequential direction be issued to incorporate the provision for the reimbursement of the amount being collected in the form of GST after 01.07.2017. The petitioners have also prayed for a direction to the respondents to provide for the refund of the amount being paid/deposited under the GST from the various running accounts bills of the contractors. A consequential prayer has been made to issue a writ of mandamus to the respondents to revise the schedule of rates (in short SOR ) of the SBD so as to make it GST compliant. For purpose of narrating the case of the petitioners, this court has taken the facts from the writ application being CWJC No. 3288/2019. A counter affidavit has been filed in this writ application but it is only on behalf of the Executive Engineer, Flood Control Division, Karhagola, Katihar, Bihar (respondent no.8). In his counter affidavit he has stated hat so far as the work in the present writ application is concerned, it was completed on 25.03.2018 for value of ₹ 5174.09147 Lakhs a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejected. As regards the implementation of the GST Act, the respondents have taken a stand that a Committee of the Rural Works Department, Government of Bihar has examined it s implication in the light of the guidelines issues by the National Rural Infrastructure Development Agency, Ministry of Rural Development, Government of India vide Circular No. GO21(117)-3201/FA dated 06.06.2018 (Annexure C to the counter affidavit). It is further stated that in accordance with the said Circular dated 06.06.2018, Bihar Rural Road Development Agency, Rural Works Department, Government of Bihar (in short BRRDA ) has vide letter No. 1059 dated 05.12.2018 issued under the signature of the Nodal Officer, circulated the aforesaid guidelines to all the Executive Engineers which specifically provides for additional payment provision/clause. Since Annexure C to the counter affidavit has been relied upon, this court thinks it just and proper to reproduce Annexure C as under: - National rural Infrastructure Development Agency Ministry of Rural Development, Government of India 15 NBCC Tower, 5th Floor, Bikaji Cama Place, New Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n completed. (Category B). iii. Works sanctioned, after 01.07.2017, under different phases of PMGSY wherein GST has not been accounted for in the original proposal/sanction and for which tender process has not been initiated. (Category C). iv. All new works proposed and yet to be proposed i.e. works which are in the pipeline under PMGSY. (Category D). 5. Following are the Guidelines suggested to be followed by all SRRDAs - A. Category A i. The new Goods and Service Tax (GST) laws require that all invoices should show the value of supply and GST separately, and the value of supply will therefore, include non-GST taxes, which remain embedded in the input prices, such as taxes on petroleum products. ii. The Project components under different major heads (like Earth, Sand, Aggregates, Steel, Bitumen etc.) are to be intimated by the Contractor, checked and confirmed by the competent authority. iii. The major issue under GST regime is to identify the portion of the existing contract that will come under GST. Therefore, there is a need to cull out GST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions. Therefore, Section 140 of the GST law in effect allow credit of all subsumed taxes paid by a taxable person on his inputs, including the Central Excise Duty embedded in the price of inputs. x. Thus, the supplier gets ITC into the GST credit ledger through Transitional Provisions (including both the VAT and Central Excise Duty paid on the inputs). xi. The contractor while raising their bill and tax invoice post- GST, will now collect GST as indicated above from the employer and will remit the same to the respective Government. The entire GST of the supply will have to be finally borne by the employer. xii. The contractor will have to pay GST on the value of work, which he will pay to the respective Government, partly using the ITC that represents the taxes that he has already paid through the inputs, and partly using cash collected from the procuring entity concerned. xiii. Through this arrangement, the supplier also cannot claim to have incurred loss on account of embedded taxes that has been paid on the inputs. B. Category B i. The works sanctioned after 01.07.2017, may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PMGSY as may be applicable to the State. 7. These instructions will not apply to cases were the proposals have been made with necessary GST component for which no revision of cost is required or permitted. 8. This has concurrence of IFD, MoRD vide diary dated 28.05.2018. Yours sincerely, (Shamthi Priya S.) Director (F A) Copy to: 1. JS (RC) DG, NRIDA, Krishi Bhavan, New Delhi. 2. All Financial Controllers of Nodal Department of PMGSY. 3. Director (Tech)/Director (P-III)/Director (P-I,P-II) NRIDA 4. Dy. Secretary (RC Division) MoRD, Krishi Bhavan, New Delhi. 5. Dy. Secretary (IFD), MoRD, Krishi Bhavan, New Delhi. Director (F A) It is further stand of the respondents that Annexure C has also been duly considered by the Committee headed by the Engineer-in-Chief in rural Works Department on 12.12.2018 and upon consideration the Schedule of Rates (in short SOR ) has been revised. In this regard, reliance has been placed on letter no. 391 dated 29.01.2019 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he following terms: - Re.: CWJC No. 2734 of 2019 A counter affidavit on behalf of the Building Construction Department has been filed today. Let it be kept on the record. Re.: CWJC No. 3288 of 2019 with analogous cases The matter has been heard again for some time. Mr. Prabhat Ranjan, learned counsel for the petitioner as well as learned counsel for the State namely, Vikash Kumar, Ms. Archana Meenakshee and Mr. Kumar Alok all have participated in course of argument. Mr. Rajesh Kumar Verma, learned Assistant Solicitor General on behalf of the Union of India is also present. Mr. Prabhat Ranjan, learned counsel for the petitioner has drawn attention of this court towards Annexure C to the counter affidavit filed on behalf of respondent nos. 6 to 9 to submit that in fact the Government of India under Ministry of Rural Development has come out with a guideline for implementation of Goods and Service Tax (in short the GST ) in the works contract matters. Annexure C dated 06.06.2018 is the said guideline and according to the same the States are obliged to work out the impact of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ractors in the light of the aforesaid circulars and guidelines. In course of argument, certain submissions have been made based on the Schedule of Rate (SOR). Copy of the SOR is, however, not on the record, and, therefore, it has been agreed at the bar that copy of the SOR showing the contract value arrived at in a work tendered prior to 01.07.2017 (pre-GST) and one SOR of the work tendered after 01.07.2017 (post-GST) be brought on record. As prayed, let this matter be listed again on 5th of July, 2019. Learned counsel for the State Ms. Archana Meenakshee is requested to place on record a copy of the SOR (pre-GST and post-GST) after obtaining the same from the department when the matter will be further heard. Today when the matters were called learned counsel for the State, Ms. Archana Meenakshee has produced before this court the two bound volumes of the SOR , one is showing the rate analysis prior to implementation of the GST whereas another one contains the rate analysis after taking into consideration the GST after 1st of July, 2017. It is evident from the SOR , copy of which has been brought before this ..... 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