GOVERNMENT OF ANDHRA PRAD~SH

FINANCE (FMU-WR.I) DEPART MENT

Memo No. 47027/297/2017 Dated: 13-09-2017

Sub Finance Department- Implementation of GST In works

contracts-Recommendations of the Committee- Instructions
Issued- Regarding. ..

Ref: 1. G.O.Rt No. 1688 Finance (FMU-WR1) Dept. Dt.28-0t-OlI:

2. Minutes of the meeting held on 11-08-2017 on
Irr:plementation of GST.

..,
~';

~overnment. vide G.O. cited constituted a Committee to formulate'

guidelin~s on implementation of GST In works coqtracts withthe followinq .
terms of reference. '4, .
... .~.
. 1

2. Procedure to be adopted for implementation of GST

'.' 1. In the ongoing works, in which provision,for VAT is made in the
. data of the estimate .
.', 2. In the ongoing works, in which prevision is made for VAT outside
. ECV. <,
.' .".
." 3. In the works for wlrtcl;\ ).tende~ are called for and
Agreements are yet to be concl\.J.~d. I
4. In the new estimates aQdin tr~ bid documents.
3. After detailed discussions, the Committee observed that the provisions
made in. the estimate towards VAT and also the agreement conditions
.regarding deduction/reimbur.sement of VAT or other taxes like service tax,
CSTare varying from Department to Department and also depending on the _-
funding agency (eg: World Bank contracts). Therefore, one method may not
be possible to adopt for all the types of contracts.

4. In the cases of new estimates, the Committee observed that the basic rate
of all the inputs without tax elements (that are subsumed in GST) has to be
adopted in the preparation of estimates, duly providing the GST component
as applicable on works contract outside ECVand added to the bill.

5. To arrive at the unit costs of all the SSR items, the Committee
recommended that the Board of Chief Enqineers may be called upon to take
up on emergency basis and constitute select groups entrusting each group
with the task of arriving at the basic rate (without the element of tax) for
certain items. .

6. As the process suggested above will take some more time and in order to
see that the progress of works is not hampered and to ensure that the
agencies are not put to inconvenience in getting payments, the committee
recommended that the intermediate payments for the work done on or after
01-07-2017 may be made without adding any % towards GST to the bill
amount and the agencies will have to be assured that they will be
compensated with the due amount towards GST as per rates arrived by the
department and after concluding the supplemental agreements.

7. After careful examination, the Government accepted the

recommendations of the Committee and all the departments connected with
the works contracts are directed to make Intermediate payments for the work
done on or after 01-07-2017, without adding any % towards GST to the bill
amount. The agencies executing the works will be compensated with the due
amount towards GSTas per rates arrived by the department after concluding
the supplemental agreements. Where the due amount towards GST as per
rates arrived by the Department ISless than the amount' paid, the same shall
be recovered from the contractor.
 .: 2 ::

8. The Board of Chief Engineers is directed to arrive at the unit costs of all
the -SSR items 'on emergency basis by 1.5-9-2017 by constituting select
groups entrusting. each group with the task of arriving at' ~he'basic rate
(without the element of tclx) for certain items.

MUDDADA RAVI CHANDRA

SPECIAL CHIEF SECRETARY TO GOVERNMENT (FAC)

To
All Department of Secretariat
All the Members of the Committee
All Engineering Department
All the Corporations
Director of Works Accounts.vlbrahimpatnarn
Copy to : P.S. to P.F.S.
SCjSF

/ / FORWARDED BY ORDERS / /

SECTION OFFICER

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