Orissa HC directs Appropriate Authority to consider difficulty faced by Contractors due to change in GST regime on Works Contract [Read Order]

The Orissa High Court directed the Appropriate Authority to consider difficulty faced by contractors due to change in GST regime on works contract.

By way of the writ petition, the Petitioner, M/s. Nobadurga Construction Pvt. Ltd, has challenged the action of the Opposite Parties in not reimbursing the differential tax amount arising out of change in tax regime from Value Added Tax (VAT) to Goods and Service Tax (GST) with effect from 1st July, 2017.

The main issue involved in such matters is that the difficulty faced by the contractors due to change in the regime regarding works contract under GST. The grievance of the Petitioner is that in view of the introduction of the GST, the Petitioner is required to pay tax which was not envisaged while entering into the agreement.

The Government has come out with a revised guidelines in this respect in supersession of the guidelines issued vide Finance Department letter dated 7th December, 2017 and hence has filed Additional Counter Affidavit of Opposite Party-authority in similar cases annexing the revised guidelines relating to works contract under GST issued by the Government of Odisha, Finance Department vide Office memorandum.

The Court of Justice Dr. S. Muralidhar, Chief Justice and Justice M.S. Raman directed that the Petitioner shall make a comprehensive representation before the appropriate authority within four weeks from the date of judgment ventilating the grievance. If such a representation is filed, the authority should consider and dispose of the same, in the light of the aforesaid revised guidelines dated 10th December, 2018 issued by the Finance Department, Government of Odisha, as expeditiously as possible, preferably within a period of three months from the date of receipt of the certified copy of the order.

The Court also noted that no coercive action shall be taken against the Petitioner till a decision by the authority is taken.

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