Andhra Pradesh HC Upholds 18% GST Demand on Pre-2022 Road and Drain Works, Directs APIIC to Settle Differential Tax with Contractor [Read Order]

The Andhra Pradesh High Court has upheld the GST assessment relating to works contract services executed for the Andhra Pradesh Industrial Infrastructure Corporation (APIIC), reiterating that the issue already stands concluded by an earlier judgment.

In the petition filed by Sri Hari Mungamuru, the assessment in Form GST DRC-07 was challenged on the ground that the imposition of GST at 18% on road and drainage works carried out for APIIC up to December 31, 2021, was incorrect. Such imposition was contended to be contrary to Entry 3(vi) of Notification No. 11/2017–Central Tax (Rate) dated June 28, 2017, as amended.

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The petitioner argued that the concessional rate was applicable for works executed for a government entity, seeking for a direction to APIIC to bear the differential tax if the higher rate was upheld. Relying on the statutory scheme and a prior judgment of the High Court on an identical issue, the tax authorities defended the assessment.

The Bench, comprising Justice R. RaghunandanRao and Justice T.C.D. Sekhar, held that the controversy was no longer res integra, having been resolved in W.P. No. 22663 of 2023 by order dated July 24, 2024. Following the said precedent, the Bench affirmed the assessment in its entirety.

At the same time, the Court directed APIIC to pay the differential tax component to the petitioner for the periods covered under the impugned order, in order to enable transfer to the Commercial TaxDepartment. The Court stated that the admitted dues must be paid within two months from the day the order is received.

Taking note of the discrepancies submitted by APIIC during the hearing on tax amounts paid, the Court directed APIIC to furnish a detailed statement of tax payments within one week. The petitioner has been allowed to reconcile the figures on receiving this communication, and if disputes persist, the Court clarified that statutory remedies remain open for determination of the exact liability.

With these directions, the writ petition was disposed of and the pending interlocutory applications were closed.

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