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IN THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH)
SOUMITRA SAIKIA
Md. Muslim Ali, Son of Late Makbul Ali – Appellant
Versus
State of Assam, Represented by the Commissioner and Secretary to the Government of Assam, Public Works Department (Roads) – Respondent
| Table of Content |
|---|
| 1. background on petitioner and contract execution. (Para 1) |
| 2. contentions regarding gst component and deductions. (Para 2 , 3 , 4 , 5 , 6) |
| 3. court analysis of gst applicability. (Para 7 , 8 , 9 , 10 , 11) |
| 4. court direction to follow procedure for gst. (Para 12) |
| 5. conclusion and order regarding the case. (Para 13 , 14) |
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
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.
Contractual agreements dictate that indirect taxes like GST, not included in the bid price, are the employer's responsibility; contractors are entitled to reimbursement.
A contractor is entitled to GST payments on completed works, as tender rates must be exclusive of GST per government circulars.
Prior tax regime remains applicable for works contracts executed pre-GST, preventing retroactive GST imposition.
A contractor cannot claim GST over and above the quoted rate when the contract explicitly states that the rate is inclusive of GST.
Point of law : Since the terms “except goods and service tax” was specified in Clause 3.3.3 of Ext.P1, the petitioner could only have quoted the bid amount, without including the GST.
The court ruled that GST does not apply to works contracts completed before 01.07.2017, directing a review of tax liabilities on such contracts and clarifying reimbursement obligations for differenti....
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