2026-VIL-306-GSTAT-PUN
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  2. 2026-VIL-306-GSTAT-PUN

SGST Tribunal

GST - Concessional rate on works contract services to co-operative societies - Sl. No. 3(vi) of Notification No. 11/2017-Central Tax (Rate) - Appellant, a Government contractor and builder, executed works contracts for the construction of factory buildings of co-operative spinning mills under projects sanctioned and monitored by the State Textile Department, and discharged tax at 12% treating the recipients as Government Entities - SCN was issued after audit and the proper officer confirmed the differential tax at 18% with interest and penalty, which the FAA partly upheld - Whether the supplies to the societies were liable to tax at the concessional rate under Sl. No. 3(vi) - HELD - The burden lies on the Appellant who claims the concession to bring the supply within the entry, which turns on the status of the recipient and the use for which the works are meant. The rate is fixed by notification under Section 9(1) and no department of the State can alter it by administrative decision. The minutes and letters of the Department settling the GST component of the contract price are decisions on price and not a determination of the rate. The presumption that official acts are regularly performed cannot give a departmental minute the force of a notification - The first limb of the definition of ‘Government Entity’ is not attracted as a body registered under the Co-operative Societies Act is not set up by an Act of Parliament or State Legislature. The second limb requires a body established by any Government with 90 per cent or more participation by way of equity or control, and a society formed under a scheme and registered under the general law is not established by the Government. Government sponsorship cannot take the place of the tests prescribed in the definition - Independently, the test under item (a) is the use for which the structure is meant, judged objectively. Either finding is sufficient to deny the concession and the supplies are taxable at 18% under item (xii) - The differential tax is rightly confirmed. The appeal is dismissed - Interest and penalty on differential tax - Sections 50(1) and 73(9) of the CGST Act - Appellant contended that the dispute was one of classification, that it acted on written directions of the Textile Department, and invoked promissory estoppel and legitimate expectation to seek waiver of interest and penalty - Whether bona fides displace interest under Section 50(1) and penalty under Section 73(9) - HELD - Section 50(1) charges interest for the period for which the tax payable remains unpaid and makes no reference to the state of mind of the taxpayer - Interest is compensatory in character and is computed on tax payable and not paid, and not on tax collected. Section 73 applies to cases without fraud, wilful misstatement or suppression and the circumstances relied upon by the Appellant are what bring the case within it. The penalty is fixed at ten per cent of the tax or ten thousand rupees, whichever is higher, and sub-section (8) provides the route to avoid it by payment of tax with interest within thirty days of the notice, which the Appellant did not make. Sub-section (9) leaves no discretion to reduce or waive the penalty on a finding of bona fides. Promissory estoppel fails as no document purported to fix the rate of tax, any representation was made by the sanctioning department and not by the authorities administering the tax, and there can be no estoppel against a liability imposed by statute. Section 50(1) makes no provision for waiver. Interest and penalty are sustained - Computation of differential tax on cum-tax basis - Section 15(1) of the CGST Act, 2017 - Appellant prayed in the alternative that the receipts be treated as inclusive of tax since it collected no amount beyond 12% - Whether the differential tax is to be recomputed on a cum-tax basis - HELD - Under Section 15(1) the value is the transaction value, being the price actually paid or payable for the supply. The invoices of the Appellant state the contract receipts as exclusive of taxes and charge central tax and State tax over and above them, and the sales register records the receipts as exclusive with nil under inclusive. Where the tax is charged over and above the price, there is no occasion to treat the price as inclusive of tax - The prayer for recomputation on a cum-tax basis is rejected - Disallowance of input tax credit not reflected in FORM GSTR-2A - Section 16(2)(c) and Section 155 of the CGST Act, 2017 - Input tax credit claimed in FORM GSTR-3B was disallowed as it was not reflected in FORM GSTR-2A, the Appellant having produced no ledger confirmation or supplier certificate as required by the Circular - Appellant contended that the transactions were genuine, that the mismatch was due to supplier-side reporting, and that denial would result in double taxation - Whether the disallowance of input tax credit with interest under Section 50(3) calls for interference - HELD - The burden of proving the claim of input tax credit lies on the person claiming it under Section 155. The Circular does not alter the conditions of Section 16(2), and for a supplier-wise difference up to the prescribed limit it called for a certificate from the supplier that the supplies were made and the tax paid in its return. The Appellant had ample opportunity but did not produce such certificates, and the documents filed did not identify the invoices making up the difference or establish that the supplies were declared in the supplier's return and tax paid thereon - A printout showing that a supplier filed a return says nothing about whether the supplies to the Appellant were declared in it. The disallowance does not rest on a finding that the purchases were fictitious but on failure to show that the tax charged was paid to the Government as required by Section 16(2)(c). The denial is not double taxation as the credit is denied because the fact of payment has not been established. Remand for verification is declined as the evidence is in the hands of the Appellant or obtainable from its suppliers and it had every opportunity to produce it. The interest under Section 50(3) rests on the disallowance, which has failed - The disallowance with interest and penalty is upheld and the appeal is dismissed.
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