The last recipient of services under a works contract is solely responsible for paying GST, not the contractor, affirming the principles of the reverse charge mechanism.

JUDGMENT :

The petitioner before this Court is a registered Civil Contractor with the PWD (Roads), Assam. The petitioner has executed several works for the department and has earned good reputation in his line of work. Since the year 2000, the Government of India has initiated a scheme “Pradhan Mantri Gram Sadak Yojana”(PMGSY) to strengthen roads in the rural areas of the country for boosting economic activities. The scheme is fully sponsored by the Central Government under the Ministry of Rural Development. These Village roads are constructed as per the specifications of the Indian Road Congress (IRC), which is the Apex body of Highway Engineers in the country. The PWD (Border Roads), Government of Assam floated a tender by electronic process on 18.01.2019 in respect of construction of road namely “L 138- Paschimchaysimana to Baladmari via Rahmania MEM, Barpeta (package No. AS 01211)” in the Barpeta and other Districts of Assam under the Pradhan Mantri Gram Sadak Yojana (PMGSY), 2018-2019, Batch-I. The tender was invited in item rate bid wise. The work for construction of the road also included maintenance of the road for five years. The item rate bids were invited by the department by the electronic tendering system by the tender notice dated 18.01.2019. The bill of quantities giving item wise quantities for the work to be executed was also included. The bidders were required to fill up the rate and total amount. The last date for the receipt of the tender through e-tendering was 04.02.2019 till 1600 hours. The bid was to be submitted item wise as per attached proforma on the bill of quantities. The petitioner submitted his bid pursuant to the e-tendering process. The Petitioner submitted his bid for the above work for Rs.17,24,37,355/- which included Rs.1,02,72,000/- for maintenance. Upon evaluation of the bids received, the bid offered by the petitioner was shortlisted as the lowest bid. And thereafter, letter of acceptance was issued by the respondent No. 2 to the petitioner on 08.03.2019.The petitioner was intimated that the tender was accepted for work for five years with the follow-up terms and conditions. Pursuant to the letter of acceptance, a contract agreement was executed by and between the petitioner and the respondent on 13.06.2019. On the same date, the Work order dated 13.06.2019 was issued. The time for completion of the work indicated was 12 months. Subsequently, the period for completion of work was extended due to the covid-19 pandemic situation which had engulfed the nation during the period 2020 to 2022.

2. As per procedure from time to time, the petitioner raised his running bills and demanded for payment in respect of the works completed. These running bills were prepared after the measurement of works completed by the department. By bill number RACC/IV/PMGSY/129 dated 25.03.2021, the department prepared running bill of Rs. 9,34,19,141/-. Payment for an amount of Rs. 7,43,15,546/- had already been released to the petitioner and after deduction of the same, balance amount of Rs. 1,21,035,95/- was paid to the petitioner. However, while preparing the running bills, the authorities did not add the GST payable to the billed amount @ 12%.

3. The learned Senior counsel for the petitioner urges before the court that under the provisions of the Central Goods and Service Tax Act 2017 and the Assam Goods and Service Tax Act 2017, the structure under the scheme of the Act, in respect of the services rendered by the petitioner the payment of GST has to be paid by the last recipient of the goods and/or services. Therefore, as per law, in matters of works contract, the GST on the billed amo