GST: State allows contractors to escalate contract bill by 5%

Maharashtra government has decided to permit contractors to submit escalated bills with variation of 5%,

After the additional burden of Goods and Service Tax (GST) and the fluctuation in fuel prices, Maharashtra government has decided to permit contractors to submit escalated bills with

variation of 5%, so that contractors will not face any major financial losses.

The civil and road contractors in Mahrashtra had refused to undertake new contracts and continue with the ongoing work because of the extra burden of GST and fluctuating prices of diesel and

petrol.

State’s public works department (PWD) on Monday issued the notification permitting contractors to submit the fresh bills with the variation of 5%. “We had asked our all district chief

engineers to call the meeting with the representatives of contractors and assistant/joint commissioner of GST and decided the settlement procedure on claim on account burden due to GST. The

chief engineer as the professional of head of the respective district has to carry out this work effectively. If some issues prop up regarding implementation of contract work agreement, they

have to consult with the government immediately,” said official from PWD on condition of anonymity.

“We received several complaints from contractors that due to the GST and flue prices, the prices of bitumen, concrete, steel and cement has been increased drastically that additional cost

has to be paid to them. However, the contract work amount that can be either paid or recovered if work amount goes down. The price adjustment in tender will be separately attached to tender

documents,” stated in the circular.

“As per the government norms, price escalation cannot be done if the work period is for only one year. Therefore, we have decided to change the work complete limit more than year so that the

contractors can avail the benefit of change in rule. 

Nevertheless, the contractors who have undertaken the potholes repairing work cannot push their work limit more than year. They have to complete the work as per the agreement only,” said

senior official from the PWD.

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