Contractor quoting for Govt Works Contract

[Guest]

Assume a Contractor who is quoting for a Govt. Dept Work.

An illustration on arriving at final rate of an item by a Contractor for an item to be quoted in price bid is as follows

BASIC PRICE(A)

Subtract DISCOUNT (B)

Add TRANSPORTATION (C)

Add PROFIT (D)

Add GST at 18% on (A+B+C+D) = (E)

TOTAL (F) = A+B+C+D+E

Amount quoted by Contractor in price bid = F

As we know, Govt. Dept will incur 12% towards GST on Works Contract offered by the Contractor. Whether Contractor will add 12% to the above value (F) and put his quote in the price bid?

Please give your thoughts

[KASTURI SETHI]

No. Any tax cannot charged twice for same supply of goods or services.

AI Summary

Double charging of GST prohibited; contractor must not add an additional GST charge to an already GST inclusive works contract price. The contractor's bid example computes a final price by adding GST at eighteen percent on the aggregated contract components and asks whether an additional twelve percent GST should be appended because the government incurs GST on the works contract. The reply states that the same tax cannot be charged twice on a single supply; the contractor should not add a separate tax charge for the same taxable supply.