In a major relief to the contractors, a division bench of the Orissa High Court headed by Chief Justice Dr. S. Muralidhar has ordered to freeze the coercive actions against the contractors and directed the State GST department to follow its circular dated 10th December, 2018 to resolve the issues relating to works contracts due to change in the tax regime from VAT to GST.
A bench of Chief Justice Dr. S. Muralidhar and Justice M. S. Raman was considering a bunch of petitions pointing out the difficulty faced by the contractors due to change in the regime regarding works contract under GST. Further, the Petitioners has challenged the action of the Opposite Parties in not reimbursing the differential tax amount arising out of change 2 in tax regime from Value Added Tax (VAT) to Goods and Service Tax (GST) with effect from 1st July, 2017. The grievance of the Petitioner is that in view of the introduction of the GST, Petitioner is required to pay tax which was not envisaged while entering into the agreement.
The division bench observed that “the Government has now come out with revised guidelines in this respect in supersession of the guidelines issued vide Finance Department letter dated 7th December, 2017. He 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.”
The High Court, while concluding, held that “In that view of the matter, the Petitioner shall make a comprehensive representation before the appropriate authority within four weeks from today ventilating the grievance. If such a representation is filed, the authority will 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 this order.”
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