On Tuesday, the Supreme Court issued notice on CG Tollway Limited’s challenge to a GST demand arising from a Build-Operate-Transfer highway project, while extending interim protection against coercive recovery. The dispute raises the question of whether a principal contractor can face a fresh tax demand for road construction work after GST has already been paid by subcontractors engaged for the same project.
CG Tollway Limited challenged a High Court view that followed the Telangana High Court’s approach on GST liability under the BOT model, despite a contrary view of the Karnataka High Court. The company argued that its subcontractors had already discharged GST on the construction activity and that another demand on the principal contractor would amount to taxing the same work twice. It also raised concern that the authorities could attach its toll collection account, affecting the operation of the highway. The petitioner pointed out that the High Court had earlier granted protection subject to a deposit of 10% of the disputed amount.
The Bench of Justice B.V. Nagarathna and Justice Joymalya Bagchi noted that toll collection itself was not the subject of the dispute, which concerned the alleged demand on construction work. The Court considered the petitioner’s submission that “a bridge is constructed only once” and that full tax had already been paid.
Finding that the challenge required examination, the Court issued notice to the Union of India and other respondents, extended the interim protection, and listed the matter for the end of July or the first week of August.
Disclaimer: This news/ article includes information received via a syndicated news feed. The original rights remain with the respective publisher.
Picture Source :