The government of Goa has directed all of its departments to rework the cost of infrastructure projects by calculating Goods and Services Tax (GST) at 18% amid the withdrawal of the concessional rate of 12% for government contracts.
The finance department released a circular to all state departments and agencies. It stated that payments for already tendered and ongoing works should be recalculated.
The state’s finance secretary mentioned in the circular:
- The payments for ongoing contracts are made by calculating 12% GST.
- Now, the respective department shall revise the payment of such contracts as per the revised 18% GST.
- Accordingly, the departments have already started preparing new estimates for construction projects.
- Also, for all ongoing contracts, a revised expenditure sanction will not be required for the increase in cost due to the 18% GST. This condition will only apply for an additional GST component of 6%.
The Central Board of Indirect Taxes and Customs (CBIC) was notified in January 2022, withdrawing the 12% GST rate for government contracts. However, on 18th July 2022, the Goa government increased GST on government contracts to 18%.
Also, the GST enforcement officers observed that the contractors were not paying GST either by not filing returns or misreporting the contract value. Hence, the finance department informed all government departments to ensure strict GST compliance.
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DVSR Anjaneyulu known as AJ, is a Chartered Accountant by profession. Loves to listening to music & spending time with family and friends.