KERALA STATE ELECTRICITY BOARD LIMITED
(Incorporated under the Indian Companies Act, 1956)
OFFICE OF THE SECRETARY (ADMINISTRATION)
Registered Office: VYDYUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM - 695 004
Telephone Nos.: +91 471 2514456, 2514575, 2514504 FAX: 0471 - 2554039
E-Mail: secretary@ksebnet.com
Website: www.kseb.in CIN: U40100KL2011SGC027424
No. FA/Tax Cell/GST/Tendering/2017-18 Date: 02/02/2018
CIRCULAR
Sub: - GST - Tendering in GST regime – detailed course of action – reg.
Ref: - 1. Circular No.90/2017/Fin dt 14/12/2017 of Government of Kerala.
2. Letter No.TRC/ALP/AB3/GST Compensation/2017-18/847 dated
29/11/2017 of the Deputy Chief Engineer, Transmission Circle,
Alappuzha to the P.A. to Director (Finance).
3. Letter No.AB/Acc/GST/2017-18/173 dated 17/11/2017 of Executive
Engineer, Electrical Division, Kannur.
4. Circular No.FA/Tax Cell/GST/Guidelines/2017-18 dated 23/10/17.
5. Circular No. D(T&SO)/T1/Gl./17-18/888 dt 11/08/17 issued by
Director (Transmission &System Operation).
With the implementation of GST in India, various clarifications and suggestions are
being sought from field offices of KSEBL regarding tendering in the post-GST regime.
The main bottleneck in the tendering process is on account of the fact that, where the
supplier levies GST over and above the quoted price, there is every possibility that the total
price will come above the estimated price, for which approval from Board is required in
most of the cases. Hence the mode of preparation of PAC is a cause of concern, i.e., whether
the PAC should include the GST component or should be exclusive of GST.
The Board has examined the matter in detail. In order to clear the ambiguity in the
tendering process in KSEBL, the following Guidelines are issued:
1. Estimate preparation:
In most of the works, the estimate is prepared based on the latest available
Delhi Schedule of Rates (DSR) indexed by the applicable cost Index. At present, the
DSR 2016 is being adopted for estimate preparation. The rate of materials in
DSR 2016 included the then existing taxes like Excise Duty and VAT, etc. Due to the
difficulty in separating taxes, these rates may be used for preparing the estimates. All
estimates which are prepared for Administrative Sanction should include the
estimated cost and applicable GST shall be shown separately.
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2. Tendering:
While inviting Tenders/ Quotations, the PAC should be assessed exclusive of
GST. The contractor shall be asked to quote the price excluding GST, and
considering all other taxes, if any, applicable. The price has to be quoted, after
considering the current market rate and after passing on the benefit of Input Tax
credit, as per section 171 of the CGST Act 2017. The GST Registered persons only
shall be eligible to participate in the Tenders with PAC more than `20 Lakhs.
The contractor shall be asked to specify their registration status (Un-
registered/compounding/Registered), GSTIN, if any, and applicable GST (both Rate
and Amount) separately in bid/quotation submitted.
The following points shall be considered by the prospective bidder, while
quoting GST Rate in their bids:
In case of unregistered contractors, the rate and amount shall be shown as
“Nil”.
In case of a compounding dealer, GST shall be quoted as “Nil” as
compounded dealers cannot collect GST from the consumers.
In case of work contracts or pure labour contracts, the bidder shall quote
single GST rate for the work.
In case of composite supplies, i.e., a supply consisting of one principal
supply and other ancillary supplies, the supply will attract the GST Rate of
the principal supply. For example, if Item A in the supply order is the major
or principal supply and other items are ancillary supplies, the bidder shall
quote the GST Rate applicable to the principal goods (i.e., Item A) being
supplied.
In case of supplies which are neither composite nor mixed supplies, the
bidder shall quote the GST Rate applicable to each item of supply separately.
3. Tender Evaluation (Determining L1)
a. If the tenderer/bidder does not include the details of GST separately in the
tender/quotation, the same shall be rejected.
b. If all the bidders for a Tender are registered under GST, and uniform GST
rate is applicable, Tenders shall be evaluated based on the amount exclusive
of taxes.
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c. If the bidders participated in a Tender consists of both registered and
unregistered parties, Tenders shall be evaluated based on the total outflow to
KSEBL. That is, the rates quoted by contractors inclusive of GST should be
taken into consideration for the purpose of determining the L1. If reverse
charge is applicable for the subject work at the time of tender evaluation,
KSEBL’s liability on account of Reverse Charge Mechanism should also be
considered (as outflow) in the evaluation of the tender.
d. If all the bidders for a Tender are un-registered under GST, Tender shall be
evaluated based on the amount exclusive of taxes.
e. If there is difference in the GST rates quoted by each bidder for the same
item, the dispute has to be settled at the time of tender evaluation itself.
f. Additional claim of GST by a contractor/supplier successful bidder, on
account of change in the registration status after the award of work, will not
be allowed.
All tendering authorities shall follow the above instructions in evaluating the
Tenders.
4. Payment processing:
Registered/compounding Contractor/supplier should produce GST Invoice
containing all the particulars stated in Rule 46 of the CGST Rules, 2017.
The payment has to be made to the contractor for total value of work plus the
applicable GST, subject to recovery of TDS, other recoveries, etc.
Wherever there is difference in the amount admitted, the supplier may be
directed to issue a Credit Note (in case of reduction in the Invoice
value)/Debit Note (in case of increase in the Invoice value), and payment
should be released only after the receipt of such Debit or Credit Note.
5. The above points may be included in Tender documents/Agreement/Work or
Purchase Order, under “Taxes and Duties”, so that there are no chances of litigation
or ambiguity in the processing of tenders or Invoices, at a later stage. Necessary
columns shall be included in price bid format attached with all tender documents to
quote GST Rate and amount.
Sd/-
SECRETARY (ADMIN)
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