{"id":8791,"date":"2026-04-22T18:18:20","date_gmt":"2026-04-22T12:48:20","guid":{"rendered":"https:\/\/www.centaxonline.com\/blog\/?p=8791"},"modified":"2026-04-23T10:52:09","modified_gmt":"2026-04-23T05:22:09","slug":"18-gst-applies-post-despite-12-contracts-hc","status":"publish","type":"post","link":"https:\/\/www.centaxonline.com\/blog\/18-gst-applies-post-despite-12-contracts-hc","title":{"rendered":"18% GST Applies Post 18-07-2022 Despite 12% Contracts | HC"},"content":{"rendered":"<pre><strong>Case Details: <a href=\"https:\/\/www.centaxonline.com\/latest-news-updates\/gst\/101010000000418500\/differential-demand-valid-as-services-supplied-to-govt-after-18-07-2022-are-liable-to-18-gst-despite-12-contracts-hc\">Sri Ezhumalaiyan Construction vs. State Tax Officer Inspection -1 (2026) 41 Centax 230 (Mad.)<\/a><\/strong><\/pre>\n<h2><em>Judiciary and Counsel Details<\/em><\/h2>\n<ul>\n<li><strong>C. Saravanan,<\/strong> J.<\/li>\n<li><strong>S\/Shri R.Suresh Kumar<\/strong> &amp; <strong>K.M. Vijayan,<\/strong> Associates, for the Petitioner.<\/li>\n<li><strong>Mrs K. Vasanthamala,<\/strong> Govt. Adv., for the Respondent.<\/li>\n<\/ul>\n<h2><em>Facts of the Case<\/em><\/h2>\n<p>The petitioner, being a service provider to Government entities, entered into contracts prior to 18-07-2022 under which tax was chargeable at the rate of 12%. Pursuant to <a href=\"https:\/\/www.centaxonline.com\/search?searchData=Notification%20No.%203%2F2022%E2%80%93Central%20Tax&amp;itemType=AP\">Notification No. 3\/2022\u2013Central Tax<\/a>, dated 13-07-2022, the rate of tax on such services was increased to 18 % with effect from 18-07-2022. The assessment orders were passed demanding a differential tax of 6% on supplies made after the effective date of the notification. The petitioner challenged the demand on the basis of earlier contractual stipulations. The matter was accordingly placed before the High Court.<\/p>\n<h2><em>High Court Held<\/em><\/h2>\n<p>The High Court held that supplies effected after 18-07-2022 attracted the revised rate of 18%, notwithstanding earlier contractual terms. It was held that the rate stood enhanced prospectively by statutory notification, and the levy was required to be applied on supplies made after the effective date. It was further held that the department was bound to recover tax at the revised rate, and the challenge to the demand was not tenable. However, it was observed that recovery of the differential amount could be deferred in view of communications issued to Government departments for reimbursement. Accordingly, recovery of differential tax was kept in abeyance, and the concerned Government departments were directed to pursue reimbursement within the stipulated time.<\/p>\n<h2><em>List of Cases Cited<\/em><\/h2>\n<ul>\n<li>M. Murugesan v. Secretary to Government (Rural Development) Government of Tamil Nadu \u2014 [W.P. (MD). No. 9095 &amp; 13587 of 2023, dated 25-6-2024] \u2014 Followed [Para 6]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=(2023)%2012%20Centax%20170%20(Mad.)&amp;itemType=AP\">Vediappan v. Secretary to Government<\/a> \u2014 (2023) 12 Centax 170 (Mad.) = 2023 (79) G.S.T.L. 435 (Mad.) \u2014 Followed [Para 6]<\/li>\n<\/ul>\n<h2><em>List of Notifications Cited<\/em><\/h2>\n<ul>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=Notification%20No.3%2F2022%20-%20Central%20Tax&amp;itemType=AP\">Notification No.3\/2022 &#8211; Central Tax<\/a> dated 13.07.2022<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Case Details: Sri Ezhumalaiyan Construction vs. State Tax Officer Inspection -1 (2026)&hellip;<\/p>\n","protected":false},"author":19,"featured_media":8810,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37,60,189],"tags":[],"class_list":["post-8791","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gst","category-news","category-gst-case-chronicles"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>18% GST Applies Post 18-07-2022 Despite 12% Contracts | HC<\/title>\n<meta name=\"description\" content=\"HC upholds 18% GST on govt supplies post 18-07-2022 despite 12% contracts; 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