JUDGMENT : SOUMITRA SAIKIA, J. The petitioner before this Court is a registered Civil Contractor with the PWD (Roads), Assam. The petitioner has executed several works for the department and has earned good reputation in his line of work. Since the year 2000, the Government of India has initiated a scheme “Pradhan Mantri Gram Sadak Yojana”(PMGSY) to strengthen roads in the rural areas of the country for boosting economic activities. The scheme is fully sponsored by the Central Government under the Ministry of Rural Development. These Village roads are constructed as per the specifications of the Indian Road Congress (IRC), which is the Apex body of Highway Engineers in the country. The PWD (Border Roads), Government of Assam floated a tender by electronic process on 18.01.2019 in respect of construction of road namely “L 138- Paschimchaysimana to Baladmari via Rahmania MEM, Barpeta (package No. AS 01211)” in the Barpeta and other Districts of Assam under the Pradhan Mantri Gram Sadak Yojana (PMGSY), 2018-2019, Batch-I. The tender was invited in item rate bid wise. The work for construction of the road also included maintenance of the road for five years. The item rate bids were invited by the department by the electronic tendering system by the tender notice dated 18.01.2019. The bill of quantities giving item wise quantities for the work to be executed was also included. The bidders were required to fill up the rate and total amount. The last date for the receipt of the tender through e-tendering was 04.02.2019 till 1600 hours. The bid was to be submitted item wise as per attached proforma on the bill of quantities. The petitioner submitted his bid pursuant to the e-tendering process. The Petitioner submitted his bid for the above work for Rs.17,24,37,355/- which included Rs.1,02,72,000/- for maintenance. Upon evaluation of the bids received, the bid offered by the petitioner was shortlisted as the lowest bid. And thereafter, letter of acceptance was issued by the respondent No. 2 to the petitioner on 08.03.2019.The petitioner was intimated that the tender was accepted for work for five years with the follow-up terms and conditions. Pursuant to the letter of acceptance, a contract agreement was executed by and between the petitioner and the respondent on 13.06.2019. On the same date, the Work order dated 13.06.2019 was issued. The time for completion of the work indicated was 12 months. Pursuant to the letter of acceptance, a contract agreement was executed by and between the petitioner and the respondent on 13.06.2019. On the same date, the Work order dated 13.06.2019 was issued. The time for completion of the work indicated was 12 months. Subsequently, the period for completion of work was extended due to the covid-19 pandemic situation which had engulfed the nation during the period 2020 to 2022. 2. As per procedure from time to time, the petitioner raised his running bills and demanded for payment in respect of the works completed. These running bills were prepared after the measurement of works completed by the department. By bill number RACC/IV/PMGSY/129 dated 25.03.2021, the department prepared running bill of Rs. 9,34,19,141/-. Payment for an amount of Rs. 7,43,15,546/- had already been released to the petitioner and after deduction of the same, balance amount of Rs. 1,21,035,95/- was paid to the petitioner. However, while preparing the running bills, the authorities did not add the GST payable to the billed amount @ 12%. 3. The learned Senior counsel for the petitioner urges before the court that under the provisions of the Central Goods and Service Tax Act 2017 and the Assam Goods and Service Tax Act 2017, the structure under the scheme of the Act, in respect of the services rendered by the petitioner the payment of GST has to be paid by the last recipient of the goods and/or services. Therefore, as per law, in matters of works contract, the GST on the billed amount prepared by the department has to be paid by the department as it is the last recipient of the services rendered in the said works contract being executed by the petitioner. It is therefore submitted that this amount of GST may be paid by the petitioner only upon receipt of the GST amount being released by the department. Once the amount is released by the department, the GST amount shall be paid to the Government Exchequer. Since the department did not release the amount of GST in respect of the running bills raised, he could not deposit the same in the Government exchequer. It is submitted that at present the rate of GST is 12% for such contract work being executed by the petitioner. Since the department did not release the amount of GST in respect of the running bills raised, he could not deposit the same in the Government exchequer. It is submitted that at present the rate of GST is 12% for such contract work being executed by the petitioner. It is the apprehension of the petitioner that for failure to deposit the GST amount, petitioner may have to face adverse consequence under the provisions of law. It is further submitted that instead of adding the GST to the billed amount raised and releasing it to the petitioner, the respondent authorities have instead deducted CGST and SGST from the running bills of a petitioner at the rate of 2% and consequently the respondents have deducted an amount of Rs. 16,68,200/- up to the fourth running bill illegally. It is submitted that being aggrieved, the petitioners filed a representation dated 09.02.2022 before the Chief Engineer, PWD (Border Roads), Assam, raising his grievances and the prejudice faced by the petitioner for Non-Payment of GST to the petitioner in respect of the running bills released. However, no response was received from the respondent department in respect of the representation filed. 4. It is submitted by the learned Senior counsel for the petitioner that the tender conditions clearly provided that the bidders should quote their bids “exclusive of GST”. However the bills were inclusive of other levies and duties, royalties, cess, etc. which the contractors are liable to pay in the process of execution of their work. It is submitted that when the authorities prepared the bills on the basis of the rate as per the bill of quantities as submitted by the petitioner and the same was exclusive of GST. Consequently, the amount which had been paid to the petitioner in respect of the running bills must include the GST component as in terms of the provisions of the CGST 2017 and AGST, 2017. The GST has to be paid by the Government who was the last recipient of the services. The respondents were duty bound in terms of the provisions of the CGST, 2017 and the AGST 2017 to include the GST payable so that the petitioner can deposit the said amount to the GST authorities. The GST has to be paid by the Government who was the last recipient of the services. The respondents were duty bound in terms of the provisions of the CGST, 2017 and the AGST 2017 to include the GST payable so that the petitioner can deposit the said amount to the GST authorities. It is submitted that this action of the respondent authorities in not adding the GST to the bills and/or to the payments made to the petitioner in respect of the contract works is illegal, arbitrary and therefore the respondents are liable to be directed to make payment of the GST component at the prevailing rate to the petitioner so that he can deposit the tax component in the Government exchequer in compliance with the requirements of law. A further direction is also required to be issued to the respondent authorities to add the GST component in respect of all the future bills or payments required to be made to the petitioner in connection of the works executed. 5. It is further submitted that the action of the respondent authorities in deducting 2% from the bills released to the respondent authorities is contrary to the provisions of law as well as to the terms of the contract wherein it was clearly mentioned that the rates quoted should be exclusive of GST. The learned counsel for the petitioner has also referred to the communication dated 06.06.2018 issued by the National Rural Infrastructure Development Agency under the Ministry of Rural Development, Government of Assam which was a directive issued to these Principal Secretaries/Secretaries of Nodal Departments of the PMGSY (State/UT)/ Empowered Officers/CEOs and Chief Engineers of State Rural Roads Development Agencies, etc. regarding implementation of GST in works contract. regarding implementation of GST in works contract. The learned senior counsel for the petitioner submits that the adoption and consequent implication of GST under PMGSY was divided into four categories, namely, Category A relates to work sanction prior to 01.07.2017 under different phases of PMGSY and which are ongoing; Category B relates to work sanction after 01.07.2017 under different phases of PMGSY where GST has not been accounted for in the original proposal wherein tenders have been completed; Category C are pertaining to work sanctioned after 01.07.2017 under different phases of PMGSY where GST has not been accounted for in the original proposal where tender process has not been initiated; and Category D pertains to all new works proposed and yet to be proposed in i.e works which are in the pipeline under PMGSY. 6. It is submitted that in terms of the communication dated 06.06.2018, the respondent authorities made changes to the subsequent agreements. But in the agreement which was executed with the petitioner, there were no changes in terms of the advisory dated 06.06.2018. It is submitted that in so far as the agreement executed by and between the petitioner and the respondent, it is submitted that the agreement very categorically provides that the rates quoted by the petitioner should be exclusive of the GST. The learned Senior counsel for the petitioner has referred to the communication dated 08.05.2018 issued by the Ministry of Rural Development, Government of Assam to the respondent No. 1, whereby the Ministry communicated the clearance accorded for the proposals in respect of PMGSY Batch-I (2018-2019). Referring to the said communication, it is submitted that under the heading PMGSY Batch-I (2018-19), it is clearly provided that the cost amount which is reflected in the table in the said communication is inclusive of Goods and Service Tax. Therefore, where the State Government has received clearance of amount which inclusive of Goods and Service Tax, there is no occasion to deprive the petitioner from the GST component payable so that his obligations under the law can be completed by making necessary deposits. It is therefore submitted that the inaction of the respondent authorities in not releasing the GST component in respect of the bills paid to the petitioner are contrary to law as well as to the contract terms and conditions, the respondent should therefore be directed to release the GST component to the petitioner. 7. It is therefore submitted that the inaction of the respondent authorities in not releasing the GST component in respect of the bills paid to the petitioner are contrary to law as well as to the contract terms and conditions, the respondent should therefore be directed to release the GST component to the petitioner. 7. The respondents have contested the case of the petitioner by filing its affidavit. It is submitted by the respondent authorities that since the GST component is always a variable, the said component is not included in the bill of quantities and the rates quoted by tenderers. However, it was incumbent on the contractor to indicate the rate of GST prevalent on that particular date and indicate that the amount of GST required to be paid on the date when the bids were quoted. The government counsel referred to Clause 41.1 of the General Clauses of Contract which provides that there will be deduction of taxes and royalty etc, therefore, the claim of the petitioner by claiming payments for 12% of the GST is an attempt of availing an undue benefit by the petitioner. It is further submitted that under clause 39.1 of the GCC, it was clearly provided that the payments shall be adjusted for deduction for advance payments, security deposits and other discoveries in terms of the contract and taxes at source. The employer shall pay the contractor the amount certified within 15 days of each certificate. Further under Clause 41.1, the rates quoted by the contractor shall be deemed to be inclusive of the sales and other levies, duties, royalties, etc. Therefore, deficiency in the part of the contractor to provide specifications at the time of his submission of his bids cannot be given undue benefit. Under such circumstances, the claim of the petitioner is contrary to the provisions of the agreement as well as the works executed and therefore the claims made are not genuine and bonafide. Therefore, the writ petition should be dismissed 8. The learned counsel for the parties have been heard. Pleadings available on record have been carefully perused. The relevant provisions of the statute referred have also been carefully perused. 9. Therefore, the writ petition should be dismissed 8. The learned counsel for the parties have been heard. Pleadings available on record have been carefully perused. The relevant provisions of the statute referred have also been carefully perused. 9. The dispute raised in the present proceeding is whether in addition to the bills paid by the respondent authority in respect of the running bills raised by the petitioner, the GST component is also required to be paid by the respondent. It is noticed that on one hand the counsel for the petitioner has urged the proposition that the GST is to be paid under the reverse charge mechanism and as a consequence thereof, the entity which had last received the benefits, namely, the PWD department is required to pay the GST and to that extent the amount is required to be released and deposited to the State exchequer by the petitioner contractor. However, under the provisions of the GST Law, if GST component is to be paid on the reverse charge mechanism, then the entity which was the last recipient of the benefit of Goods/Service or both namely the PWD department in the present case will be required to make the necessary deposit of the GST component in the State exchequer. Under reverse charge mechanism, the amount is not required to be released to the service provider, rather the amount is required to be paid on behalf of the service provider by the entity who last received the benefit of Goods/services or both, namely the PWD in the present proceedings. Under such circumstances, if the principle of reverse charge is to be applied to the facts of the present case, then the claim of the petitioner made for release of the GST component to the petitioner goes contrary to the accepted principle of reverse charge mechanism as per the provisions of the GST statute. In this context, it is also relevant to refer to the communication dated 06.06.2018 issued by the National Rural Infrastructure Development Agency. The said communication is extracted below: “National Rural Infrastructure Development Agency Ministry of Rural Development, Government of India 15 NBCC Tower, 5 th Floor, Bhikaji Cama Place, New Delhi-110066 File No. NRRDA-G021(17)/32017-FA Dated 06.06.2018 To The Principal Secretary/ Secretary of Nodal Departments of PMGSY (State/UT), Empowered Officers/CEOs & Chief Engineers of SRRDAs, General Managers Finance (NEAs). The said communication is extracted below: “National Rural Infrastructure Development Agency Ministry of Rural Development, Government of India 15 NBCC Tower, 5 th Floor, Bhikaji Cama Place, New Delhi-110066 File No. NRRDA-G021(17)/32017-FA Dated 06.06.2018 To The Principal Secretary/ Secretary of Nodal Departments of PMGSY (State/UT), Empowered Officers/CEOs & Chief Engineers of SRRDAs, General Managers Finance (NEAs). (All State) Subject: Implementation of Goods and Service tax- Works Contract Sir/Madam, Government of India has enacted the Goods and Services Act 2017 throughout India w.e.f. 1.07.2017. The GST has subsumed various indirect Taxes of both the Central & State Government, such as Central Excise Duty, Service Tax, Central Sales Tax (CST/ Works Contract Tax (WCT)/ State Value Added Tax (VAT), Additional Custom Duty (CVD) and special Additional Duty (SAD) apart from Entry Tax and Octroi Charges etc. 2. The Standard Bidding Document (SBD) makes provisions about the taxes which directly related to Contract Value. It incorporates that whenever the tax structure is changed during the ongoing contract and new law comes into force then the contractor has to be refunded the increased amount of taxes, if any and similarly, recovery is to be made from the contractor if the taxes have decreased. 3. On request of various States, seeking clarifications of GST and issuance of guidelines for future references, this office in consultation with Integrated Finance Division (IFD) of Ministry of Rural Development (MoRD) has worked out comprehensive guidelines and categorized all the projects under PMGSY into four different categories of A, B, C and D to enable the States to calculate additional tax burden. 4. The adoption and the consequent implication of GST under PMGSY will be on the following categories of works – i. Works sanctioned, prior to 01.07.2017, under different phases of PMGSY and which are ongoing i.e. subsisting contracts( including the delayed projects, beyond the original intended completion date) under various stages of physical and financial progress -(Category A) ii. Works sanctioned, after 01.07.2017, under different phases of PMGSY wherein GST has not been accounted for in the original proposal/sanction and wherein Tenders have been completed-(Category B) iii. Works sanctioned after 01.07.2017, under different phases of PMGSY wherein GST has not been accounted for in the original proposal/Sanction and for which tender process has not been initiated - (Category C). iv. Works sanctioned after 01.07.2017, under different phases of PMGSY wherein GST has not been accounted for in the original proposal/Sanction and for which tender process has not been initiated - (Category C). iv. All new works proposed and yet to be proposed i.e. works which are in the pipeline under PMGSY - (Category D). 5. Following are the Guidelines suggested to be followed by all SRRDAs A. Category A i. The new Goods and Services Tax (GST) laws require that all invoices should show the value of supply and GST separately, and the value of supply will therefore, include non-GST taxes, which remain embedded in the input prices, such as taxes on petroleum products. ii. The Project components under different major heads (like Earth, Sand, Aggregates, Steel, Bitumen etc.) are to be intimated by the Contractor, checked and confirmed by the competent authority. iii. The major issue under GST regime is to identify the portion of the existing contract that will come under GST. Therefore, there is a need to cull out GST component of the existing contracts (i.e. the value of taxes subsumed under GST). iv. The benchmark date for this purpose will be 01.07.2017 i.e. GST will be applicable on the portions of the contracts that are being paid from 01.07.2017. v. The value of the portion of the work not completed or not paid for as on 01.07.2017 shall be divided into two components. a. Value of work including taxes and duties such as Customs Duty, taxes on petroleum products and other non-VAT taxes that have not been subsumed into GST should be worked out. b. The balance will be the value of taxes subsumed into GST such as Central Excise Duty and VAT i.e. GST component. vi. Therefore, the value of subsumed taxes under GST needs to be separated out from the contracted amount to arrive at the value of work. vii. The key issue is to estimate the value of subsumed tax carefully and as accurately as possible. For this purpose, an indicative Excel format is annexed for guidance. Model calculations are also attached herewith and states may workout similarly for all the ongoing works. Excel sheet indicates various project components which attract various types of taxes including ED, CST, VAT/WCT and other taxes which were already in the contract price as per the original contract. For this purpose, an indicative Excel format is annexed for guidance. Model calculations are also attached herewith and states may workout similarly for all the ongoing works. Excel sheet indicates various project components which attract various types of taxes including ED, CST, VAT/WCT and other taxes which were already in the contract price as per the original contract. The same format can be used to compile the information for each ongoing project, taking into consideration the GST input tax credit available for the project. The assessment of subsumed shall be submitted by the contractor along with copies of invoices and statement of input taxes duly certified by a Chartered Accountant. It is responsibility of the contractor to furnish correct details of the subsumed taxes. viii. Once the value of work sanction and GST taxes are arrived, the employer may enter into supplemental agreement with revised agreement value that will be original contracted value minus the value of subsumed tax arrived as above plus GST of 12%. i.e., the cost of the subsumed taxes factored in the original contract value is required to be deducted from the original contract price to arrive at the actual amount of "cost of the project". ix. The GST law allows the ITC (Input Tax Credit) under the existing Acts (VAT etc) to be carried forward under their Transitional Provisions. Therefore, Section 140 of the GST law in effect allow credit of all subsumed taxes paid by a taxable person on his inputs, including the Central Excise Duty embedded in the price of inputs. x. Thus, the supplier gets ITC into the GST credit ledger through Transitional Provisions (including both the VAT and Central Excise Duty paid on the inputs). xi. The contractor while raising their bill and tax invoice post-GST, will now collect GST as indicated above from the employer and will remit the same to the respective Government. The entire GST of the supply will have to be finally borne by the employer. xii. The contractor will have to pay GST on the value of work, which he will pay to the respective Government,. partly using the ITC that represents the taxes that he has already paid through the inputs, and partly using cash collected from the procuring entity concerned. xiii. xii. The contractor will have to pay GST on the value of work, which he will pay to the respective Government,. partly using the ITC that represents the taxes that he has already paid through the inputs, and partly using cash collected from the procuring entity concerned. xiii. Through this arrangement, the supplier also cannot claim to have incurred loss on account of embedded taxes that has been paid on the inputs. B. Category B i. The works sanctioned after 01.07.2017, may be treated upon status of their work, as here under: a. For works, which have been awarded and commenced on the field, action may be initiated as detailed in the Category A above. b. For works, which have been awarded but not commenced may also be treated as above before commencement of the work. ii. In cases, where tenders are initiated as per the existing SBD (Standard Bidding Document) norms, there should be no change in the evaluation criteria for selection of the bidders and bids shall be evaluated based on the criteria mentioned in the tender documents. However, after identification of the lowest bidder, it must be ensured that, all taxes subsumed under GST are carefully deducted to arrive at the value of works under the GST law, and the agreements should provide for payment of value of works plus applicable GST. C. Category C i. In cases, where the sanctions have been obtained after 01.07.2017 and tenders are yet to be initiated, the rates to be quoted shall be exclusive of GST and GST of 12% will be added to the value offered by the bidder separately. ii. The SBD may be modified to the above extent. iii. The Bill of Quantities (BoQ) shall also reflect prices offered by the bidder without GST and applicable GST separately. iv. The states shall work out the departmental cost of the work without GST for the purpose of evaluation and comparison with rates offered by the bidders. D. Category D i. In cases of all new works to be proposed under PMGSY, the states shall prepare Schedule of Rate (SoR) after deducting the taxes subsumed under GST. ii. The Detailed Project Reports shall be prepared based on this revised SoR and the state may add 12% GST to cost of the work to arrive at the overall cost of the work. iii. ii. The Detailed Project Reports shall be prepared based on this revised SoR and the state may add 12% GST to cost of the work to arrive at the overall cost of the work. iii. In all such cases approval of SoR may be obtained from NRRDA as per existing practice. 6. Revision of Cost The states shall work out the impact of GST for all the works individually for all category of works indicated above and shall submit detailed proposals based on the same. Any cost excess that may be required shall be borne by MoRD and the state in the existing Fund sharing pattern of PMGSY as may be applicable to the state. 7. These instructions will not apply to cases were the proposals have been made with necessary GST component for which no revision of cost is required or permitted. 8. This has concurrence of IFD, MoRD vide diary dated 28.05.2018. Yours sincerely, (Shamithi Priya S.) Director (F&A)” 10. A careful perusal of the said communication reveal that the contract works of the petitioner is likely to be covered under category B and not category D as claimed by the petitioner. Category B is applicable for works sanctioned after 01.07.2017 under different phases of PMGSY wherein GST has not been accounted for in the original proposal or sanction and wherein tenders have been completed. For works sanctioned after 01.07.2017 and which have been awarded and commenced on the field, the action suggested is as detailed under category A. Under the action proposed or suggested under category-A, it is provided at serial No.(iv) that GST will be applicable on the portions of the contract that are being paid from 01.07.2017. In Clause v, it is provided that the value of the portion of work not completed or not paid as on 01.07.2017 shall be divided into two components, a. Value of work including taxes and duties such as Customs Duty, taxes on petroleum products and other non-VAT taxes that have not been subsumed into GST should be worked out. b. The balance will be the value of taxes subsumed into GST such as Central Excise Duty and VAT i.e. GST component vi. Therefore, the value of subsumed taxes under GST needs to be separated out from the contracted amount to arrive at the value of work. vii. b. The balance will be the value of taxes subsumed into GST such as Central Excise Duty and VAT i.e. GST component vi. Therefore, the value of subsumed taxes under GST needs to be separated out from the contracted amount to arrive at the value of work. vii. The key issue is to estimate the value of subsumed tax carefully and as accurately as possible. For this purpose, an indicative Excel format is annexed for guidance. Model calculations are also attached herewith and states may workout similarly for all the ongoing works. Excel sheet indicates various project components which attract various types of taxes including ED, CST, VAT/WCT and other taxes which were already in the contract price as per the original contract. The same format can be used to compile the information for each ongoing project, taking into consideration the GST input tax credit available for the project. The assessment of subsumed shall be submitted by the contractor along with copies of invoices and statement of input taxes duly certified by a Chartered Accountant. It is responsibility of the contractor to furnish correct details of the subsumed taxes. viii. Once the value of work sanction and GST taxes are arrived, the employer may enter into supplemental agreement with revised agreement value that will be original contracted value minus the value of subsumed tax arrived as above plus GST of 12%. i.e., the cost of the subsumed taxes factored in the original contract value is required to be deducted from the original contract price to arrive at the actual amount of "cost of the project". ix. The GST law allows the ITC (Input Tax Credit) under the existing Acts (VAT etc) to be carried forward under their Transitional Provisions. Therefore, Section 140 of the GST law in effect allow credit of all subsumed taxes paid by a taxable person on his inputs, including the Central Excise Duty embedded in the price of inputs. xi. The contractor while raising their bill and tax invoice post-GST, will now collect GST as indicated above from the employer and will remit the same to the respective Government. The entire GST of the supply will have to be finally borne by the employer. xii. xi. The contractor while raising their bill and tax invoice post-GST, will now collect GST as indicated above from the employer and will remit the same to the respective Government. The entire GST of the supply will have to be finally borne by the employer. xii. The contractor will have to pay GST on the value of work, which he will pay to the respective Government, partly using the ITC that represents the taxes that he has already paid through the inputs, and partly using cash collected from the procuring entity concerned. xiii. Through this arrangement, the supplier also cannot claim to have incurred loss on account of embedded taxes that has been paid on the inputs. 11. A careful reading on the above extracted advisory reveals that the procedure required to be followed by the PWD department is clearly delineated in the communication dated 06.06.2018. However, from the facts pleaded before the Court, it is evident that the procedure prescribed under Category A, which is also applicable to Category B cases, has not been followed by the respondent department. 12. Under such circumstances, the claim of the petitioner is allowed by directing the respondent authorities to follow the procedure prescribed under category A (which is also applicable for category B cases where works are sanctioned after 01.07.2017 and which have been awarded and already commenced) and which procedure is applicable in the case of the writ petitioner as his case falls under category B (i)(a). 13. In view of the above, the respondents will now proceed to take all steps necessary and as prescribed under the communication dated 06.06.2018 and execute these steps specifically and implement the same in a time bound manner. The amount deducted from the petitioner @ 2% for GST shall also be refunded. Let this exercise be carried out within a period of three (3) months from the date of receipt of a certified copy of this order. 14. The writ petition accordingly stands allowed and disposed of. No order as to cost.