In re Karam Chand Thapar & Bros (Coal Sales) Limited (GST AAR West Bengal)
The applicant entered into three separate contracts in January 1996 with THDC India Limited for execution of civil works relating to the Tehri Hydro Power Plant under Packages I, II and III. The works were completed in the pre-GST regime, and final bills were raised between 2010 and 2011. During execution, multiple disputes arose between the parties concerning extra expenditure, price adjustments, rebates, deductions and additional works.
As per Clause 60 of the agreements, disputes were to be resolved through a four-tier mechanism culminating in arbitration. Pursuant to orders of the Supreme Court, an Arbitral Tribunal was constituted in 2015. The Tribunal passed separate awards on 01.11.2023 in favour of the applicant under various heads. Subsequently, THDC initiated proceedings under Section 34 of the Arbitration and Conciliation Act, 1996 before the Delhi High Court. The parties thereafter opted for conciliation before a Disputes Resolution Committee (DRC), which directed payment of ₹94.56 crore. A settlement agreement was executed on 24.10.2024 and payment was received.
The applicant sought advance ruling on whether the amounts received pursuant to arbitration and settlement constituted “supply” under GST, whether they were liquidated damages, whether GST was applicable, and the relevant SAC, rate and documentation requirements.
