Page 48 - GSTL_30th April 2020_Vol 35_Part 5

534 GST LAW TIMES [ Vol. 35
By way of this writ petition, petitioner has challenged the action of the
opposite parties in not reimbursing the differential tax amount arising out of
change in tax regime from Value Added Tax (VAT) to Goods and Services Tax
(GST) with effect from 1-7-2017.
Batch of writ petitions are being filed on this issue. The main issue in-
volved in such matters is that the difficulty faced by the contractors due to
change in the regime regarding works contract under GST. The grievance of the
petitioner is that in view of the introduction of the GST, petitioner is required to
pay tax which was not envisaged while entering into the agreement.
Learned Addl. Government Advocate submits that the Government has
now come out with a revised guidelines in this respect in supersession of the
guidelines issued vide Finance Department letter dated 7-12-2017. He has filed
an Additional Counter Affidavit of O.P. No. 2 in similar cases annexing the re-
vised guidelines relating to works contract under GST issued by the Government
of Odisha, Finance Department vide Office Memorandum No. FIN-CTI-TAX-
0045-2017/38535/F, dated 10-12-2018, which reads as under :
“Sub : Revised guidelines relating to works contract under GST.
The guidelines regarding works contract under GST was issued vide
Finance Department letter No. FINCTI-TAX-0045-2017-36116/F, dated 7-12-
2017. Subsequently, the National Rural Infrastructure Development Agency
(NRIDA), Ministry of Rural Development, Government of India have is-
sued guidelines for works contract on implementation of Goods and Ser-
vices Tax. Several representations have been received from the contractors
claiming additional amount towards GST in respect of the works put to
tender prior to 1-7-2017 but executed either partly or wholly after 1-7-2017.
On careful consideration of the representation of the contractors vis-a-
vis existing guidelines issued in the matter, Government have been pleased
to issue following revised guidelines in supersession of the guidelines is-
sued vide Finance Department letter dated 7-12-2017.”
1. The Goods and Services Tax (GST) has come into force w.e.f. 1st July,
2017 by subsuming various indirect taxes such as Excise Duty, VAT, CST, Entry
Tax, Service Tax, etc. Works contract is treated as composite supply of service
under GST and are taxable @ 18%, 12% or 5% depending on the nature of works
contract. In order to comply the provisions of GST relating to works contract the
State Government have revised the Schedule of Rates-2014 (SoR-2014) vide
Works Department OM No. 13827/WD, dated 16-9-2017 w.e.f. 1-7-2017. While
the item rates in the SOR-2014 were inclusive of all taxes i.e. Excise Duty, VAT,
Entry Tax, Service Tax etc., the same has been excluded in the Revised SoR-2014.
Therefore, while preparing estimates for a work after 1-7-2017, the GST exclusive
work value is to be arrived at as per the revised SoR-2014 and then GST will be
added at the appropriate rate.
2. In GST regime, the works contractor is required to raise Tax Invoice
clearly showing the taxable work value and GST (CGST + SGST) separately.
3. In case of work, where the tender was invited before 1-7-2017 on the
basis of SoR-2014, but payments made for balance work or full work after im-
plementation of GST, the following procedure shall be followed to determine the
amount payable to the works contractor;
(i) Item-wise quantity of work done after 30-6-2017 (i.e. the Balance
Work) and its work value as per the original agreement basing on
the pre-revised SoR-2014 is to be ascertained first.

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