LatestGoods & Service Tax (GST) 25 October 2026
Karnataka HC Sets GST Reimbursement Rules, Blocks ₹2.74 Crore Recovery
The Karnataka High Court clarified that GST reimbursement on works contracts must follow differential guidelines, rejecting a claim to recover ₹2.74 crore under Section 79. The ruling permits parties to contest the recovery and outlines the tax treatment for similar contracts, emphasizing that only the tax component attributable to the contractor's services is refundable while the employer's share remains non‑recoverable, setting a precedent for future disputes.
Karnataka HC clarifies GST reimbursement rules for works contracts.
- Differential guidelines apply; only contractor‑tax component is refundable.
- Recovery of ₹2.74 crore under Section 79 rejected.
- Parties may contest the claim in future cases.
The ruling sets a precedent for how GST on similar contracts is treated, limiting employer‑share recovery.
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