Assessee allowed to take reimbursement of additional GST liability on contract/work order awarded in pre-GST regime

Last updated: 26 December 2022

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Quick Summary

The Chhattisgarh High Court has ruled that assessees can claim reimbursement for additional Goods and Services Tax (GST) liability incurred on contracts awarded before the GST regime. The court directed the petitioner to file a fresh claim with proof of the extra tax paid. The respondent authority must then review and decide on the claim within 90 days.

Court :
Chhattisgarh High Court

Brief :
The Hon'ble Chhattisgarh High Court in M/s GordhandasGobindram v. State of Chhattisgarh [WPC No. 5471 of 2022 dated December 20, 2022] allowed the petition filed by the assessee to seek reimbursement of the additional tax liability on implementation of the Goods and Services Tax ("GST") law for contracts and work orders which had been executed before the GST regime.

Citation :
WPC No. 5471 of 2022 dated December 20, 2022

The Hon'ble Chhattisgarh High Court in M/s Gordhandas Gobindram v. State of Chhattisgarh [WPC No. 5471 of 2022 dated December 20, 2022] allowed the petition filed by the assessee to seek reimbursement of the additional tax liability on implementation of the Goods and Services Tax ("GST") law for contracts and work orders which had been executed before the GST regime.

Facts

This petition has been filed by M/s GordhandasGobindram ("the Petitioner"), who was awarded a contract/work order by the Public Works Department, Raipur ("the Respondent") prior to the introduction of GST law. The Petitioner on account of the introduction of new GST law was required to pay certain additional tax liability, which the Petitioner now intends to get it refunded from the Respondent.

The Petitioner submitted that the Respondent itself has taken a policy decision vide order dated October 10, 2018 ("Impugned Order") passed by the State Government to ensure the reimbursement of additional tax liability incurred by the contractors in respect of contracts, which were awarded prior to July 1, 2017 i.e. the date from which the GST law came into force.

Issue

Whether the Petitioner is entitled to seek reimbursement of additional GST liability imposed after the introduction of GST law?

Held

The Hon’ble Chhattisgarh High Court in WPC No. 5471 of 2022 held as under:

Relied on the judgment of the Hon’ble Chhattisgarh High Court in M/s D.A. Enterprises v.State of Chhattisgarh [WPT No.94 of 2020 on November 17, 2022], wherein under identical set of facts the Court allowed the petition.
Permitted the Petitioner to approach the Respondent in terms of the Impugned Order.
Directed the Petitioner to file a fresh claim and produce necessary proof of the additional tax liability incurred on account of the introduction of the GST law within a period of one week.
Further directed the Respondent, to scrutinize Petitioner’s fresh claim and take a decision within a further period of 90 days.

FAQ :

Yes, the Chhattisgarh High Court has allowed assessees to seek reimbursement for additional GST liability on contracts and work orders executed before the GST regime.

The case involved M/s Gordhandas Gobindram, who sought reimbursement from the Public Works Department, Raipur, for additional GST paid on a contract awarded before July 1, 2017.

The claim is based on a policy decision by the State Government, dated October 10, 2018, which allows for the reimbursement of additional tax liability for pre-GST contracts.

The assessee needs to file a fresh claim with the respondent authority and provide necessary proof of the additional tax liability incurred due to GST within one week.

The respondent authority is directed to scrutinise the fresh claim and make a decision within 90 days of receiving it.