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PALAMOOR - RANGA REDDY LIFT IRRIGATION SCHEME - PACKAGE -5

REPORT ACCOMPANYING THE REVISED GST & EMBEDDED TAX


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Name of Work: Construction of Stage-2 pumping station near Veeranjaneya
Reservoir at Yedula (V) including Design, supply, erection,
testing and commissioning of Electro Mechanical works such as
Vertical-Single Stage-Francis Turbine Pump and Synchronous
motor sets for 9 No.s of 145 MW each including all accessories
and Construction of tunnel from Km. 23.325 to Pump House at
Yedula (V), Gopalpet (M), Mahabubnagar District.
Technical sanctioned : CER No.16/2015-16 Dt.16-01-2016 for Rs.
4826.00Crores.
Nam of executing Agency.: M/s MEIL- BHEL (JV), Hyderabad .
Agreement. No. : LS.- 09/PRLIS/2016-17 Dt.06.06.2016.
Agreement value. : Rs. 3,993.94 Crores.
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Provision was made towards VAT @ 5% on Civil works and @ 12.5 % on E&M
works In original sanctioned estimate in schedule-B of agreement .
Subsequently the new tax regime in the form of G.S.T was introduced by the
Government of India with effect from dt. 01-07-2017. Accordingly all the work
contracts shall be treated as ‘Supply of Services’ and to be levied GST. The
Government of Telangana have issued certain guidelines on implementation
of GST for various work contracts in all Engineering Departments and issued
guidelines on implementation for works Contracts, The Government have
directed the Board of Chief Engineers on quantification of embedded taxes
and to set up mechanism for monitoring of GST payments. The Board of Chief
Engineers have examined the issue in detail and recommended the following
during the meeting held on dt.18-07-2018.
1. Prior to GST regime, all work contract Estimates are inclusive of taxes.
(i.e. embedded taxes).
2. All the embedded taxes of respective SORs prior to GST will be
indicated and Up loaded in I&CAD web site duly collecting the same
from respective departments.
3. Based on the above details, the embedded taxes are to be assessed
and approved by concerned technical sanctioning authority for each
item of work for which technical sanction was accorded earlier and
issue a proceedings for the work concerned which shall be followed
by the DDOs while processing the bills.

The Embedded tax rates of materials and machinery of Irrigation items for the
previous SORs 2009-10 to 2016-17 is approved by the HODs/ENCs level
meeting with all Engineering Departments held on 20-08-2018 and
communicated vide Engineer-in-Chief,
(I.W),I&CAD.Dept.Proc.No.NC/IW/P&M/EE/DEE-2/AEE.5/GST/ 2018-19/Vol-II,
dt.28-08-2018. The Approved embedded tax rates are up loaded on
I&CAD web site.
Based on the above guide lines, the embedded taxes for each item of
estimate pertaining to package No 5 of PRLIS are worked out and
submitted to the department for implementation of GST and regulating
the work bills. Accordingly Chief Engineer, PRLIS, Hyderabad has
accorded permission vide CE
Memo.CE/PRLIS/HYD/OT1/TS2/Pkg.5/Vol.4/4091 dt.18-12 - 2018 and
payment was released in RA bills.
Subsequently, the Engineering –in-Chief (A.W) (I.W)- I&CAD Dept
has issued instructions on the revised embedded tax rate of previous
SoRs (related to irrigation items) from 2009-10 to 2016-17 duly
superseding the earlier approval of BOCEs on quantification of
Embedded Tax rates vide reference Proc.No. ENC/IW/P&M/EE/DEE-2
/AEE.5/GST/2018-19 /Vol-III, dated: 09-04-2019.
1. Same hire charges of machinery are to be kept as adopted in pre-
GST regime in the post –GST regime for all the on going works as
on 01.07.2017
2. Same machinery lead / conveyance charges are to be kept as
adopted in pre –GST regime in the post-GST regime for all the on
going works as on 01.07.2017
3. In respect of common materials likes bricks (Except factory made
aerated bricks like Aerocon etc) and course aggregate (Crusher
by product), same rates are to be retained as adopted in the pre –
GST regime in post- GST regime for all the ongoing works as on
01.07.2017.

Based on the above revised guidelines on implementation of GST for


the package No-5, PRLIS item wise tax involved is worked out duly
revising as per latest orders and submitted for regulating the work
bills, without effecting the cash flow.