TS TO PAY 5% MORE ON CONTRACTS

The state government has decided to pay 5 per cent more to contractors on each bill drawn for government work taken on or after July 1.

TS Chief Secretary S.P. Singh has sent a circular to all departments to issue instructions to drawing and disbursement officers (DDOs) accordingly. The government has said that this is an interim arrangement.

The GST Council had fixed 18 per cent GST on government works which after being pressurized by the TS government it reduced to 12 per cent. The state government wants the work contracts to be levied GST of 5 per cent.

In his circular, Mr Singh Secretary said the issue of implementation of GST in respect of ongoing contracts is under examination of the Board of Chief Engineers.

As far as payment of the bills on which 12 per cent GST would apply, the government has made an interim arrangement of 5 per cent in addition to the bill value. This will be added towards the GST liability of the agency concerned. These interim arrangements shall be applicable only for running bills and not final bills.

He said that excess allowance if any, shall be recovered from the balance payments or security deposits. He has directed the heads of the departments to issue instructions to their DDOs and to ensure GSTN registration of the agency so that the additional 5 per cent payment can be made.