The state Finance department of Kolkata has issued a memorandum informing about the change in the execution of work order with the GST (Goods and Services Tax) rate on the works contract being enhanced from 12 to 18 per cent. The memorandum states that in cases of work for which Administrative Approval and Financial Sanction (AAFS) has been issued but tender has not been floated before July 18, 2022 revised AAFS by enhancing GST to 18 per cent is to be done before floating of tender.

In all cases where revised AAFS is required solely due to enhancement of the rate of GST, the administrative departments may accord revised AAFS irrespective of the value of the project after obtaining the concurrence of the financial advisor of the department. It has further directed that in all cases where a work order is given inclusive of all taxes and there is no indication of rate of GST in tender document, there will be no scope for change of tendered value by enhancing the GST rate to 18 per cent from 12 per cent. In all cases where a work order is given inclusive of all taxes and there is clear indication of rate of GST (@12per cent) in tender document, the tendered value of unbilled works many be enhanced by 6 per cent subject to adjustment of the cost of inversion if any. In all cases where tender is under process and there is a clear indication of rate of GST (@12 per cent) in the tender document and the closing date of submission is before July18, 2022 tendered amount may be enhanced by 6 per cent subject to adjustment of cost of inversion, if any.

Sources:- https://www.millenniumpost.in/kolkata/gst-rate-on-works-contract-enhanced-to-18-from-12-500863?infinitescroll=1