NHBF National Highways Builders Federation NHBFINHAW/2022-23/218 414! April 2022 The Chairperson, National Highways Authorty of India, NHAI- HQ, G-586, Sector-10, Bwarka, New Delhi- 110075 \d Attention -Ms. Alka Upadhyaya, IAS) ‘Sub: Request for clarity on additional cost incurred by the ContractoriGoncessionaire towards payment during Maintenance / O&M Period due to implementation of GST under Change in Law as per provision of Clause 19.17 of Model EPC Agrooment and Clause 35 of Modal Concession Agreement-Reg. Respected Madam, NHBF and its member organizations have been working hard to contribute effectively to the task of Nation Building, as per best of their abilities, intensions and resources, we are making this ‘communication to you madam that infrastructure industry is facing specific issues in relation to GST in, EPC and Hybrid Annuity Mode Projects, where bid due date was on before 30.06.2017. Pursuant to the introduction of GST law, with effect from 01.07.2017, there had been paradigm shift in the prevalent Indirect Tax Structure in India. Due to such change in tax structure, our members had to incur extra cost (in the form of GST) in the entire supply chain, which ultimately burdens the project's financial position to a large extent. To overcome the increased tax burden during construction phase, the Authority by issuing circulars/SoP/Template time to time, has reimbursed the additional cost incurred by the Contractor/Concessionaire on Contract Price/Bid Project Cost (Main Project Cosi) under ‘Change in Law with the applicable tax rate, But, the Authority has yet to definelissue SoP with regard to the Payment of GST on Operation & Maintenance cost in HAM projects and Maintenance Cost in EPC Projects, where the bid due date was ton before 30.06.2017. Due to which the Contractor/Concessionaire are incurring additional cost against GST during Operation and Maintenance period. Further, we are also unable to submit our claim due to absence of SoP on O8M cost under Change in Law. It is pertinent to mention that as per provision of “Change in Law” (Clause 19.17 of Model EPC Agreement and Clause 36.1 of Model Concession Agreement), the Authority have to place the ‘Concessionaire/Contractor in the same financial position as it would have enjoyed had there been no ‘Change in Law resulting in increased costs, reduction in return or other financial burden as aforesaid In light of above, itis kindly requested to issue SoP for reimbursement of additional cost incurred by the Contractors/Concessionaire due to implementation of GST during Maintenance / O&M Period as per provision of clause 19.17 of Model EPC Agreement and Clause 35.1 of Model Concession Agreement, where the bid due date was on or before 30.06.2017. We sincerely look forward for a prompt and positive response from your office madam. ‘Thanking you, Yours Faithfully, For National Highway Building Federation, wre@h_, (Vinod Kumar Agarwal) President Copy for kind information and necessary actions: 1. The Seoretary, Ministry of Road Transport & Highways, Transport Bhawan, 1, Parliament Street, New Delhi-110001. (kind Attn: Sh. Giridhar Aramane, |AS) 2, The Addl, Secretary, Ministry of Road Transport & Highways, Transport Bhawan, Parliament Street, New Delhi-110001 (Kind Attn: Sh. Amit Kumar Ghosh, IAS) 3, PS to Minister, MoRT&H, Transport Bhawan, Parliament Street, New Delhi-110001 (Kind Attn: ‘Sh, Sanket Bhondave , |AS) NATIONAL HIGHWAYS BUILDERS FEDERATION C-713/G, Palam Extension, Opp. Shiksha Bharti College & Old School, Sector 7, Dwarka, New Delhi-t10 075 Web: wwnv.nhbf.co.in » E-mail : nhbf-road@gmail.com, groverpuran@gmail.com ‘Tel: 011-40040241, 011-25081247 + Mob. 0811672668