State to pay project contractors 7 pc more to offset GST costs

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The state government has issued a memo, directing departments to pay 7 pc extra over the bills to contractors in the wake of GST imposition. Earlier, the state government was collecting 5 pc VAT on works from contractors. But, the GST on work contracts has been reduced to 12 pc and the remaining 7 pc amount would be paid by the departments concerned to project work contractors.“The state government issued a memo and all the departments should follow it,” chief secretary SP Singh said at a review meeting at the Secretariat here on Wednesday. The chief secretary held a meeting with officials of all departments on the impact of GST and the follow-up action.

Singh wanted officials to ensure that there should be no slowdown in the progress of works in the wake of GST and asked them to hold a meeting with engineering officials to create awareness among them about GST. Irrigation special chief secretary SK Joshi explained the extra burden on the department before and after GST. Commercial taxes special chief secretary Somesh Kumar and others also attended the meeting.

WAY BILLS: Commercial taxes principal secretary Somesh Kumar issued orders on Wednesday, mandating issue of way bills. Accordingly, every registered person under Telangana Goods and Services Tax Act – 2017 shall generate way bill online. Those wanting to generate way bill initially should register at and get a password. Way bill is required for movement of goods which are not exempted under the Act for all purposes — coming into the state or going out of it or for movement within the state when the total value of tax invoice/bill of supplies/delivery challan exceeds `50,000.

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