Section 5 of the IGST Act, 2017 – Payment of GST on Reverse Charge Basis - The Execution Application is filed for executing the Arbitral Award dated 23rd June 2014 passed in favour of the Applicant and against the Municipal Corporation of Greater Mumbai, which is aggrieved by the Award passed by the Arbitral Tribunal. However, the said challenge was repelled by a learned single judge of this Court vide his order dated 27th February 2019. Even an Appeal filed under Section 37 of the Arbitration Act before the Division Bench of this Court was dismissed on 8th September 2021. The order of the Division Bench was thereafter challenged before the Hon’ble Supreme Court by filing an SLP which was also dismissed on 22nd November 2021. The Hon’ble Supreme Court granted time to the MCGM up to 31st March 2022, to make payment to the Applicant. The Appellant submitted that the amounts deposited was not the entire amount due and payable under the Award but after withholding an amount of Rs.67,94,965.02 allegedly towards payment of the GST and which according to the MCGM, was the liability of the Applicant. The Counsel on behalf of the MCGM, contended that the Applicant’s argument that the GST law is not applicable, is contrary to the provisions of the Act. The court observed that it would be the MCGM [the recipient of the service] who would be liable to pay the GST on a Reverse Charge basis as contemplated under Section 5(3) of the IGST Act.

Held that:- The Hon’ble Court directed that the MCGM shall credit Rs.67,94,965.02 on or before 30th August 2022. Once this amount is credited, the Arbitral Award dated 23rd June 2014 shall be marked as fully satisfied and the Applicant would thereafter have no claim whatsoever against the MCGM. Consequently, the above Execution Application shall also stand disposed of once the amount of Rs.67,94,965.02 is credited in the abovementioned Bank Account.