Coimbatore Corporation Contractors Welfare Association Versus State of Tamil Nadu, The Commissioner of Municipal Administration, The Commissioner, Coimbatore Corporation, The Chief Accounts Officer, Coimbatore Corporation, The Cheif Engineer, Coimbatore Corporation, The Commissioner, GST Policy Section, The Commissioner of Commercial Taxes
GST
2017 (10) TMI 783 – MADRAS HIGH COURT – [2017] 1 GSTL 13 (Mad), 2018 (10) G. S. T. L. 165 (Mad.)
MADRAS HIGH COURT – HC
Dated:- 5-10-2017
W. P. No. 24853 of 2017
GST
T. S. Sivagnanam, J.
For the Petitioner : Mr. S. Doraisamy
For the Respondents : Mr. A. Sri Jayanthi [ For R1 to R6 ], Mr.K.Venkatesh [For R7 & R8]
ORDER
The petitioner is an association registered under the provisions of the Tamil Nadu Societies Act bearing Registration No.81/2012. The Association was formed for the Welfare of the members of the Road Contractors, who have been carrying on works for the National Highways and Highways department and other Gov
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e respondents stating that the contract works for which the agreements were executed prior to 01.07.2017 GST cannot be imposed and 2% VAT alone is applicable.
7. Alternatively the association stated that if the petitioners are compelled to pay anything over and above 2%, the respondent in addition to the value of the work done, has to remit the GST as per the notification, since the representations submitted by the petitioner/ association have not been considered and no orders were passed.
8. When the case came up for hearing on 18.09.2017, the petitioner was directed to implead the Secretary to Government, Commercial Taxes Department and the Commissioner of Commercial Taxes. Accordingly, an application was filed to implead and the same was ordered by order dated 20.09.2017.
9. Mr.K.Venkatesh, learned Government Advocate [Taxes] accepted notices for the newly impleaded respondents and it appears that he had personally spoken to the Commissioner of Commercial Taxes, from which, it is
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ad resulted in representations from contractors of ongoing works for compensation by procuring entity for increased tax liability over and above the contracted value of work. The difficulties arising out of increased GST on works contracts for Government work was deliberated in the GST Council Meetings held on 20th August 2017 and 9th September 2017. Consequently, the GST on works contracts for Government work is being reduced to 12 percent. This move more or less balances the taxes on works contracts in the pre GST and post GST regime.
6. Pending notification of guidelines in the matter, the Government now direct that all departments and procuring entitles shall made 'on account' payment of bills presented by contractors, restricting the payments to the value due as per existing contract agreements. Any difference on account of final payment due based on the guidelines to be issued and the 'on account' payment made as above may be adjusted from out of the 5 percent
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