GOVERNMENT OF ANDHRA PRADESH FINANCE (FMU-WR.!) 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-WR.I) Dept. Dt.28-07-017. 2. Minutes of the meeting held on 11-08-2017 on implementation of GST. some Government. vide G.O. cited constituted a Committee to formulate guidelines on implementation of GST in works contracts withthe following terms of reference. 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 provision is made for VAT outside ECV. 3.In the works for which tenders are called for and Agreements are yet to be concluded. 4. In the new estimates and in the 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/reimbursement of VAT or other taxes like service tax, CST are 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 ECV and added to the bill. 5. To arrive at the unit costs of all the SSR items, the Committee recommended that the Board of Chief Engineers 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 GST as per rates arrived by the department after concluding the supplemental agreements. Where the due amount towards GST as per rates arrived by the Department is less than the amount paid, the same shall be recovered from the contractor.8. The Board of Chief Engineers is directed to arrive at the unit costs of all the SSR items on emergency basis by 15-9-2017 by constituting select groups entrusting each group with the task of arriving at the basic rate (without the element of tax) 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, Ibrahimpatnam Copy to : P.S. to P.F.S. SC/SF // FORWARDED BY ORDERS // oh, SECTION OFFICER