New Delhi: An illuminated Parliament ahead of midinight launch of ‘Goods and Services Tax (GST)’ in New Delhi on Friday. PTI Photo
The Maharashtra government has decided to scrap all ongoing tenders for awarding contracts for various development works to factor in the Goods and Services Tax (GST) impact. The state finance department has issued orders directing departments to cancel all such tenders where the GST factor was not accounted for and where work orders had not yet been issued.
“Departments have been asked to refloat such tenders after incorporating the decrease or increase in the contract cost owing to GST,” said a senior official. But an exception has been made for emergency work like broad repairs. While the departments have been permitted to go ahead with the existing tender and issue work orders in such cases, they have been asked to renegotiate the revised payables with the beneficiary contractors.
While the state’s fiscal managers are still reviewing the full impact of the decision, a senior official said the roads, the public works department and the irrigation department will be the most impacted. Meanwhile, the government is seeking legal opinion on how to rework contracts where work orders had been issued already. Legal advice has also been sought for contracts where some work had been carried out before the GST regime kicked in on July 1, while the remaining contract work and tied-up payments were to be made post July 1.
