Lr.No.

xxxxxxxxxxx Date: xxxxxxxxxxx

To,
The Authority,
Project: xxxxxxxxxxxxxxxxxxxxxxxxxxx

Sub: Notice under Article 35 of Concession Agreement notifying additional cost involved
due to Change in Law on account of VAT/Sales Tax on HSD - Reg

Ref: i) Lr.No. xxxxxxxxxxxxxxxx dated xxxxxxxxxx.

Dear Sir,

The Concession Agreement was signed on _______. The Appointed Date for the Project is
______ as declared by Authority vide letter ___________. Bid Due Date for submission of Bids
was _______.

There have been changes in the VAT/ Sales Tax on the HSD over a period of time since the last
date for Bid submission. The rates of VAT/Sales Tax in different spells are tabulated below for
the appreciation of the impact on the Project.

The notifications of Ministry of Finance on Excise Duty indicating the change in the rate from
time to time with respect to the date 30 days prior to the last date for Bid submission are
enclosed herewith as Annexure - A for ready reference.

The increase in VAT/Sales Tax has impacted the cash flows of the Project to the extent of about
Rs._______till 31.08.2020. The detailed calculations based on the consumption and purchase
invoices are worked out and are enclosed herewith in Annexure – B.

Clause 35.1 of Concession Agreement provides for Increased Costs in terms of Change in Law
and reads as, “If as a result of Change in Law, the Concessionaire suffers an increase in costs
or reduction in net after-tax return or other financial burden, the aggregate financial effect
of which exceeds the higher of Rs. 1.9 Cr. or 2% (two per cent) of the total Annuity Payments
in any Accounting Year, the Concessionaire may so notify the Authority and propose
amendments to this Agreement so as to place the Concessionaire in the same financial
position as it would have enjoyed had there been no such Change in Law resulting in
increased costs, reduction in return or other financial burden as aforesaid,…”

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The impact on account of variation in the rate of Excise Duty falls under Change in Law
pursuant to the above provisions of the Concession Agreement as the Concessionaire is
suffering financial burden and the aggregate financial effect of which exceeds the higher of
Rs. 1.9 Cr in the current Accounting Year.

We hereby notify the Authority pursuant to Clause 35.4 for cash compensation of financial
burden on account of increased costs due to variation in Excise Duty at the earliest to improve
the cash flows in the Project especially in the present situation due to COVID-19 all the
country.

Thanking and assuring you of our best services at all times.

With Best Regards

Your’s faithfully,
For xxxxxxxxxxxxx

xxxxxxxxxxxx
Authorized Signatory

Encl: As above.

Cc: 1) The Regional Officer, xxxxxxxxxxxxxxxxx

2) The Team Leader

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