Ashoka Buildcon Limited Vs State of Jharkhand (Jharkhand High Court)
Jharkhand High Court has ruled that government contractors are entitled to reimbursement for Goods and Services Tax (GST) incurred on projects awarded prior to the GST regime’s implementation on July 1, 2017. This decision, delivered in the case of Ashoka Buildcon Limited vs. State of Jharkhand, aligns with previous pronouncements by the court, emphasizing principles of fairness and equality in state contractual dealings.
Ashoka Buildcon Limited had filed a writ petition seeking the release of ₹19,86,44,336 withheld by the Jharkhand Bijli Vitran Nigam Limited (JBVNL) since November 2017. This amount represented the GST impact on the Ranchi and Medininagar projects under the Integrated Power Development Scheme (IPDS). The petitioner contended that JBVNL was obligated to pay the increased contract price due to GST’s introduction, as per circulars issued by the Rural Electrification Corporation, applicable to IPDS projects. Furthermore, the petitioner highlighted that similar benefits had been extended to other contractors under the same scheme.
The crux of Ashoka Buildcon’s argument was that, with the advent of GST during the ongoing contract, the liability to pay GST should rest with the employer (JBVNL) since, under the GST regime, payment liability arises upon the ‘supply’ of goods, which occurred when the petitioner supplied goods to JBVNL.
