BMC negotiates post-GST contracts

The BMC has started negotiating with contractors to bring down the contract amount for contracts that were awarded between July 1, when the Goods and Services Tax (GST) came into effect, and August 22, when the GST rate was brought down to 12 per cent from the earlier proposed 18 per cent. The state government issued a circular on September 11 directing civic bodies across the state to negotiate the contract amount.

The BMC awards contracts on an all-inclusive price that includes the cost of the project and taxes including GST. Between July 1 and August 22, 2017, the civic body awarded around Rs 1,800 to Rs 2,000 crore worth of contracts that included GST at 18 per cent.

Earlier, the state government in a circular had directed the civic body to cancel all contracts for which work orders were not issued, and float fresh short tenders as per the new GST rate. However, civic officials cited technical issues in implementing it.

If contractors refuse, the concerned civic body is to cancel the contract and float a fresh tender.