Goa Shipyard Limited, Thr. Its Auth. Rep. Kishore Manohar Samant vs. Shoft Shipyard PVT. LTD., Thr. Its Rep. R Ram Garg
Held
The Court held that the Petitioner is not liable to pay GST on the interest awarded under the arbitration. This decision was based on the ruling of the Gujarat Authority for Advance Ruling dated 26.06.2025, which held that the Respondent (Decree Holder) is not liable to pay GST on "interest awarded under arbitration" and "costs awarded under arbitration". Consequently, the impugned orders of the Executing Court directing the Petitioner/Judgment Debtor to pay GST on these amounts were quashed and set aside. The Court made the Rule absolute in terms of the prayer clause (a) of the petitions, allowing the Petitioner's challenge. The Executing Court was permitted to proceed with the execution of the arbitral awards in accordance with law, excluding the GST component on interest payments.
Facts
These five writ petitions were filed by Goa Shipyard Limited (Petitioner/Judgment Debtor) challenging five orders passed by the Civil Judge Senior Division at Vasco Da Gama. The orders directed the Petitioner to pay GST at 18% on part payments of interest due under arbitral awards. The Respondent, Shoft Shipyard Pvt. Limited, is the Decree Holder seeking execution of these awards. The Petitioner contended that GST was not payable on the interest awarded. During the pendency of the petitions, the Respondent obtained an Advance Ruling from the Gujarat Authority for Advance Ruling on the issue of GST liability on awarded interest and costs.
Key Issues
1. Whether the Petitioner, as a Judgment Debtor, is liable to pay GST on the part payment of interest awarded under arbitral awards, as directed by the Executing Court? The Petitioner argued that GST is not leviable on interest awarded under arbitration, relying on the principle that such interest is part of the arbitral award itself and not a separate taxable supply. The Respondent, initially seeking GST payment, later presented an Advance Ruling. The Gujarat Authority for Advance Ruling was approached by the Respondent to determine if GST was due on amounts claimed in execution proceedings, specifically "interest awarded under arbitration" and "costs awarded under arbitration".
AI-generated summary — verify with the full judgment below
16-20 WP -770-2024 & ORS (1).odt Meena IN THE HIGH COURT OF BOMBAY AT GOA WRIT PETITION NO.770 OF 2024 WITH WRIT PETITION NO.771 OF 2024 WITH WRIT PETITION NO.773 OF 2024 WITH WRIT PETITION NO.776 OF 2024 WITH WRIT PETITION NO.777 OF 2024 Goa Shipyard Limited A company incorporated under the Laws of India Having its oice at Vasco da Gama Goa–403 802 hrough its authorised Representative Mr. Kishore Manohar Samant Son of late Manohar Sitaram Sawant Aged 58 years, R/o H.No.196/1/10, Surya Nagar Colony, Zuari Nagar, Sancoale, Goa ..... Petitioner Versus Shoft Shipyard Pvt. Limited, A company incorporated under the Laws of India, Having its oice at Plot No.A-365,Road No.2B, Wagle Industrial Estate, hane- 400 604 through its Representative R Ram Garg, General Manager, ... Respondent Mr. S.D. Padiyar, Senior Advocate with Mr. Gaurish Agni and Mr. Prayash Shirodkar, Advocates for the Petitioner. Mr. Nikhil Pai with Mr. Narsimha Vernekar, Advocates for the Respondent. 16-20 WP -770-2024 & ORS (1).odt CORAM:- VALMIKI MENEZES, J. DATED :- 6th August, 2025 ORAL JUDGMENT:
Heard learned Counsel for the parties.
Rule. Rule made returnable forthwith with the consent of the pa
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