The Maharashtra Authority of Advance Ruling has held that GST is applicable on a total of the escalated value plus the original value of the contract. The applicant M/s. B. P. Sangle Construction Pvt. Ltd., is engaged in the construction of public roads for the Government authorities and also provides construction services for Private parties. The applicant has been awarded a tender from NHAI for the construction of roads for a certain amount. There is a clause in the tender according to which, in case there is a change in the rates of labor, steel, cement, plant, machinery, spares, bitumen, lubricants, etc. the contract price shall increase or decrease as per the formula provided in the tender notice. In the event of such escalation of value, the same shall be recovered in addition to tender value from NHAI. Applicant approached advance ruling authority to clarify whether the escalated value shall be added to taxable value under section 15 of the GST Act.
Source Taxscan
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