The Finance Department, Haryana has issued a notification releasing payments on account of impact of the change in GST for construction works from 12% to 18%. This change in GST rates for were notified on 18th July, 2022. The present notification was issued on 3rd February, 2023.
The net impact of the change in contracts where payments are to be made inclusive of taxes has been stated in a table attached to the present circular.
The impact will be applicable to the price adjustment as well as maintenance during Defect Liability Period
Furthermore, additional payment on account of the increase in GST will be applicable on the following works:
1. The works where the agreement has been signed prior to 18th July , 2022, and payments are to be made beyond 18th July, 2022, and the contract is silent on the impact of change in the law.
2. No extra GST shall be admissible on the works where the financial bids were submitted prior to July 8, 2022, and have opened and negotiated at a later date.
3. The increase in GST rates shall not have any impact on the TDS deductible
For the contracts where the payments are to be made exclusive of taxes, the net impact of the increase in GST shall be 6% of the contract value.