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of <h1>Flawed Tender Process: GST Discrepancies Impact Fairness</h1> <h3>Bharat Forge Limited Versus The Principal Chief Materials Manager Diesel Locomotive Works And 7 Others</h3> Bharat Forge Limited Versus The Principal Chief Materials Manager Diesel Locomotive Works And 7 Others - 2021 (51) G. S. T. L. 153 (All.) Issues Involved:1. Validity of GST rates and HSN Code classification in the tender process.2. Compliance with the Make in India policy.3. Fairness and transparency in the tendering process.4. Responsibility of the tendering authority to ensure uniform bidding.Issue-wise Detailed Analysis:1. Validity of GST Rates and HSN Code Classification:The petitioner argued that the procurement product, 'Turbo Wheel Impeller Balance Assembly,' should be taxed at 18% under HSN Code 84148030, as per Chapter 84 of the GST Tariff. The respondent no.6 quoted a GST rate of 5%, classifying the product under Chapter 86, which led to a significant price difference in the bids. The petitioner contended that this misclassification resulted in an unfair advantage to respondent no.6, placing the petitioner at a disadvantage. The court noted that the tender document did not specify the relevant HSN Code, leading to discrepancies in the GST rates quoted by different bidders. The court emphasized that it is the responsibility of the tendering authority to seek clarification from GST authorities regarding the correct HSN Code and GST rate to ensure a fair bidding process.2. Compliance with the Make in India Policy:The petitioner, being a local manufacturer with 97.68% indigenous content, claimed that it was unfairly prevented from availing the benefits under the Make in India policy due to the incorrect GST rate quoted by respondent no.6. The policy mandates a preference for products with at least 50% local content, with a margin of purchase preference of 20%. The court acknowledged that the petitioner was entitled to the benefits of the Make in India policy and that the incorrect GST rate quoted by respondent no.6 affected the petitioner's ranking and eligibility for preference.3. Fairness and Transparency in the Tendering Process:The court highlighted that the tendering process must be fair, transparent, and provide a level playing field for all bidders. The discrepancy in GST rates quoted by different bidders due to the lack of clarity on the HSN Code led to an unfair advantage for some bidders. The court emphasized that the tendering authority must ensure that all bidders quote the correct GST rate to maintain fairness and transparency in the selection process.4. Responsibility of the Tendering Authority to Ensure Uniform Bidding:The court held that it is the responsibility of the tendering authority to provide a level playing field for all bidders by mentioning the correct HSN Code in the tender document. This would ensure that all bidders quote a uniform GST rate, preventing any unfair advantage. The court directed the respondent no.2, General Manager, Diesel Locomotive Works, Varanasi, to seek clarification from GST authorities regarding the correct HSN Code and GST rate and include this information in the tender document to ensure uniform bidding.Conclusion:The court concluded that the tendering process was flawed due to the lack of clarity on the HSN Code and GST rate, which affected the fairness and transparency of the process. The court directed the tendering authority to seek clarification from GST authorities and mention the correct HSN Code in the tender document to ensure a level playing field for all bidders. The writ petition was disposed of with these observations and directions.
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