Case Law Details
B S Kumar Swamy Vs State of Karnataka (Karnataka High Court)
Karnataka High Court directed the State and Government Agencies to calculate ‘tax difference’ on balance works executed or to be executed after 01.07.2017. In nut-shell, court directed to determine the pre-GST and post-GST tax difference in case of works contract.
Facts- This writ petition is filed under Article 226 of the Constitution of India, praying to declare that the provisions of the GST Act is inapplicable in respect of works contract where provisions of service are made before 01.07.2017 in so far as petitioners are concerned and consequently that the respondents have no jurisdiction to either issue notice or to take any coercive steps against the petitioners under the provisions of the GST Act dated 01.07.2017.
Conclusion- Direction given to the State and Government Agencies to calculate the works executed pre-GST (prior to 01.07.2017) under KVAT regime and payments received by the Petitioners. The payments received by the Petitioners pre-GST for such works executed before 01.07.2017 are to be assessed under the KVAT tax regime – either under COT or VAT scheme as applicable. Calculate the balance works to be completed or completed after 01.07.2017, in the original contract. Thereafter, derive the rate of materials, and KVAT items required or used to complete the balance works. Accordingly, directed to calculate “tax difference” on such balance works executed or to be executed after 01.07.2017 separately.
A supplementary agreement may be signed with the Petitioners for the revised GST-inclusive work value for the Balance Work completed or to be completed as determined above and in case the revised GST-inclusive work value for the Balance Work, completed or to be completed after 01.07.2017, is more than the original agreement work value, the Petitioners are to be paid /reimbursed, as the case may be, the differential tax amount by the concerned employer ; so also, in case payments for works completed pre-GST are made post-GST, the concerned employer has to pay or reimburse, as the case may be, the differential tax amount, to the Petitioners.
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