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Sreedhanya Construction Company – Appellant
Versus
State of Kerala – Respondent
JUDGMENT :
Can a person who enters into a contract with the Government or its agencies that contains a specific clause that the rate quoted shall be inclusive of ‘GST & other taxes’ turn around and claim that he is entitled to Goods & Services Tax (GST) over and above the rate quoted by him? This is the short question that arises for consideration in these cases.
2. Petitioners are common in these two writ petitions. Since the issues arising for consideration in these two writ petitions are identical, these writ petitions can be conveniently disposed of by a common judgment. The exhibits and the parties referred to in this judgment are they are marked and they appear in W.P.(C.) No.33109 of 2024, unless otherwise indicated.
3. The Petitioner is a partnership firm engaged in undertaking contracts for construction of roads and bridges and is stated to be a registered ‘A class’ Contractor with the Kerala Public Works Department. It entered into agreements with the Kerala Road Fund Board for certain works. The relevant portions of the contract agreement executed between the petitioner and the Kerala Road Fund Board is marked in both these writ petitions as Ext.P1. While the contract agree
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.
A contractor is entitled to GST payments on completed works, as tender rates must be exclusive of GST per government circulars.
The court ruled that tender documents clearly required prices quoted to exclude Goods and Services Tax (GST), affirming that ambiguity in contractual terms did not exist.
Contractual agreements dictate that indirect taxes like GST, not included in the bid price, are the employer's responsibility; contractors are entitled to reimbursement.
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.
Prior tax regime remains applicable for works contracts executed pre-GST, preventing retroactive GST imposition.
Contractor claims for GST reimbursement upheld based on tender terms despite prior ordinance.
The court affirmed the applicability of prior tax assessment rules over new GST regulations for works contracts executed prior to GST implementation, ensuring equitable treatment for contractors rega....
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