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IN THE HIGH COURT OF KERALA AT ERNAKULAM
HARISANKAR V.MENON
Ganga Constructions, Represented By Its Managing Partner Smt. Meena Mamu – Appellant
Versus
Assistant Executive Engineer, Local Self Government Department – Respondent
| Table of Content |
|---|
| 1. contractor awarded work; gst included in payments (Para 1) |
| 2. dispute over gst payment requirement in tender (Para 2 , 3 , 8) |
| 3. clarifications on payment processes regarding gst (Para 4 , 5 , 6 , 7 , 9 , 10) |
| 4. petitioner entitled to gst payment as per law (Para 11) |
JUDGMENT :
HARISANKAR V. MENON, J.
The petitioner is stated to be a contractor and pursuant to a notice inviting tender dated 23.02.2019, floated by the respondent – Municipality, placed the tender, and the petitioner was also awarded the work as evidenced by Ext.P1 work order dated 18.06.2019. An agreement was also entered into between the petitioner and the respondent – Municipality, as evidenced by Ext.P2, as per which the total estimate for the work is a sum of Rs.2,53,82,519.35. The petitioner contends that the amount quoted above and forming part of the agreement is exclusive of GST with reference to the provisions of the CGST/SGST Act, 2017. Therefore, with reference to various circulars issued by the Government, the petitioner state that while making periodical payments to the petitioner, GST was also paid to it. Later, pursuant to an audit report at Ext.P15, wherein it was recorded that the GST is
A contractor is entitled to GST payments on completed works, as tender rates must be exclusive of GST per government circulars.
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 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 tender documents clearly required prices quoted to exclude Goods and Services Tax (GST), affirming that ambiguity in contractual terms did not exist.
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.
Contractors are entitled to reimbursement of differential taxes arising from the transition from VAT to GST based on previous agreements, ensuring compliance with both existing guidelines and timelin....
Mandatory reimbursement of differential GST amounts by contracting authorities for works executed pre-GST, respecting established tax laws and prior contractual obligations.
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