District court gives jolt to PMC, freezes ₹2.81 crore in civic body’s bank account; Court acts after civic body fails to pay GST to contractor firm

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Pune : NpNews24 Online  – Pune Municipal Corporation (PMC) | The district court has given a jolt to the PMC for not paying GST to a contractor firm even after a decision by the tribunal. The court has ruled that since the GST of ₹2.81 crore which has not been paid by the PMC, funds of the same amount in PMC’s bank account should be frozen. Since the civic body did not take any action even after a decision by the tribunal, it has had a negative effect on the coffers of the civic body. The incident has taken place in the electricity department of the PMC. (Pune Municipal Corporation (PMC))

 

The electricity department of the PMC had given a contract of removing sodium and metelide lamps and install LED lamps to Ujjwal Pune Private Limited (Tata company) to save power in civic limits. Because of these lights, the 98.5 per cent of the amount saved in the bill is being given to the company and 1.5 per cent is being given to the PMC. After the GST slabs were changed, the company sought an amount of ₹3.31 crore with seven per cent interest from 2019 as GST difference. The civic body refused to pay the amount and the matter was taken to the tribunal by the company. The tribunal ruled that the PMC would have pay the amount to the company.

 

It was necessary for the PMC to appeal against the tribunal’s order within six months. However, the PMC started talks with the company. A tax consulting firm EY was appointed regarding the payment of the GST difference. The consulting firm has not yet submitted its report. Meanwhile, during the coronavirus pandemic, the PMC neglected this issue because it was busy with other issues.

 

Since the company approached the district court because the PMC was not implementing the tribunal’s order, the court ruled on March 4 that the PMC should give ₹2.81 crore with seven per cent interest from 2019. Since the money was not paid by the PMC, the court has frozen an equivalent amount in the civic body’s bank account.

 

Meanwhile, the PMC has served a legal notice to Ujjal Pune company seeking arrears of ₹16 crore. The notice states that if the company refuses to pay the amount to the PMC, it would cancel the LED contract with the company.

 

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