Reduced Performance Security Benefit for Government Contracts Extended Till March 2023

The Centre extends the benefit concerning the reduced performance security of 3% for all government contracts and tenders till 31 March 2023. This move aims to render additional liquidity to firms for project execution.

The Centre reduced the quantum of performance security to 3% of the value of the contract; earlier, it was 5% to 10%. The reduction was initiated as a part of the various liquidity measures introduced to fight the economic disruptions caused by the COVID-19 pandemic. Earlier, the relief was accessible for all tenders and contracts issued on 31 December 2021.

Industrial bodies, including sectors such as manufacturing, services, and construction, had indicated the need for extending the reduction in performance security benefit, at least in the short term.

The industry will be able to use additional resources in project execution as the industry’s economic and timely project execution is essential for high-speed development of infrastructure as visualised via the National Infrastructure Pipeline (NIP).

This relief has benefitted the manufacturing, construction, and service sectors. With this relief, industries can respond enthusiastically to the government’s demands for systematic project execution.

For any clarifications/feedback on the topic, please contact the writer at bhavana.pn@cleartax.in

You May Also Like

Taxation of dividend income received on or after 1 April 2020 (FY 2020-21)

You may receive a dividend from your equity or mutual fund investments.…
Gold Jewellery

24K Gold Rate in India for November 2019: Week 4

The fourth week began with the gold rate in India holding at…
GSTR-9

CBIC has notified an extension of two months to various GST compliance

The government of India has notified yet another extension for the completion…
Tax Exemption

CBDT issues guidelines under section 194Q

The income tax department issued a circular dated 30th June 2021 laying…