Sri Ayyappan Constructions v. The Chief Engineer & Ors.

SUBSCRIBE FOR FULL CONTENT


The Tax Publishers 2019 TaxPub(GST) 0893 (Mad-HC) : (2019) 089 ITPJ (G) 0844 Sri Ayyappan Constructions v. The Chief Engineer & Ors. CENTRAL GOODS AND SERVICES TAX ACT, 2017 --Levy of GST--Works contract taken from City Municipal Corporation prior to implementation of GSTLiability to pay GST----Where assessee had entered into a works contract with a Municipal Corporation prior to implementation of GST regime and the Municipal Corporation agreed to deduct 2% GST as TDS, whereas applicable rate of GST was 12%, Court directed both the parties to revise the terms of their contract in terms of Government Order, i.e., G.O. Ms. No. 296, Finance [Salaries] Department, dated 9-10-2017. --Assessee was executing works contract for Salem City Municipal Corporation. The said contract was taken prior to GST regime and it did not provide for payment of GST. While the work was under way, GST regime became operational and the contractor (Petitioner) inquired with Municipal Corporation regarding liability to pay GST. Municipal Corporation stated that it would be deducting 2% TDS at the time of making payments under said contract pursuant to which work is under progress. *Held:* There was no disputation or disagreement that the tax liability is 12 % for the contract. Further, there was no disputation that both parties shall be governed by Government Order namely, G.O. Ms. No. 296, Finance [Salaries] Department, dated 9-10-2017. Paragraph 10(a) of the said Government Order is applicable up to 30-6-2017 and paragraph 12 is applicable from 1-7-2017, after implementation of GST regime. In terms of the said Government Order, the procuring entities were to negotiate existing agreements with works contractors and enter into supplemental agreements with revised agreement value fixed, as original contracted value minus the value of subsumed tax plus GST as applicable. The procuring entities shall make payment of final bills accordingly in terms of the Order. The exercise of quantification in terms of the Order was to be completed by both the parties expeditiously within the stipulated period. Central Goods and Services Tax Act, 2017 Section 9 *REFERRED :* FAVOUR : Partly in assessee's favour A.Y. : IN THE MADRAS HIGH COURT M. SUNDAR, J. Sri Ayyappan Constructions v. The Chief Engineer & Ors. W.P. No. 25119 of 2019 and WMP No. 24683 of 2019 SUBSCRIBE FOR FULL CONTENT

The Tax Publishers 2019 TaxPub(GST) 0893 (Mad-HC) : (2019) 089 ITPJ (G) 0844

Sri Ayyappan Constructions v. The Chief Engineer & Ors.

CENTRAL GOODS AND SERVICES TAX ACT, 2017

--Levy of GST--Works contract taken from City Municipal Corporation prior to implementation of GSTLiability to pay GST----Where assessee had entered into a works contract with a Municipal Corporation prior to implementation of GST regime and the Municipal Corporation agreed to deduct 2% GST as TDS, whereas applicable rate of GST was 12%, Court directed both the parties to revise the terms of their contract in terms of Government Order, i.e., G.O. Ms. No. 296, Finance [Salaries] Department, dated 9-10-2017. --Assessee was executing works contract for Salem City Municipal Corporation. The said contract was taken prior to GST regime and it did not provide for payment of GST. While the work was under way, GST regime became operational and the contractor (Petitioner) inquired with Municipal Corporation regarding liability to pay GST. Municipal Corporation stated that it would be deducting 2% TDS at the time of making payments under said contract pursuant to which work is under progress. Held: There was no disputation or disagreement that the tax liability is 12 % for the contract. Further, there was no disputation that both parties shall be governed by Government Order namely, G.O. Ms. No. 296, Finance [Salaries] Department, dated 9-10-2017. Paragraph 10(a) of the said Government Order is applicable up to 30-6-2017 and paragraph 12 is applicable from 1-7-2017, after implementation of GST regime. In terms of the said Government Order, the procuring entities were to negotiate existing agreements with works contractors and enter into supplemental agreements with revised agreement value fixed, as original contracted value minus the value of subsumed tax plus GST as applicable. The procuring entities shall make payment of final bills accordingly in terms of the Order. The exercise of quantification in terms of the Order was to be completed by both the parties expeditiously within the stipulated period.

Central Goods and Services Tax Act, 2017 Section 9

REFERRED :

FAVOUR : Partly in assessee's favour

A.Y. :

IN THE MADRAS HIGH COURT

M. SUNDAR, J.

Sri Ayyappan Constructions v. The Chief Engineer & Ors.

W.P. No. 25119 of 2019 and WMP No. 24683 of 2019