Ref No: GDC/C1503012/NGP/FLY/LASA/

To,
The Team Leader,
LEA Associates South Asia Pvt.Ltd.
Plot No.18, Swaraj Vihar Wathoda
Nagpur

Kind Attn: Mr. Bipul Chakraborty

Sub: Construction of 4 lane flyover on NH-6 integrated with ROB,s and river bridge including
approach ramps, service roads, footpath over RCC utility duct from Pardi Octroi Naka to Itwari
(CH.544/665 to 548/065) and inner ring road from Manewada to Kalamna (CH.20/760 to 23/190),
and from Rani Prajapati square to Vaishno Devi square (CH.00/000 to 00/596) including rub on
LC.No. 71, 72 and connecting inner ring road junction to APMC Kalamna Market gate No.1&2,
Nagpur, Maharashtra Reg:"Regarding Reimbursement of additional amount under clause no
19.17 due to change in GST rates.

Ref : 1.GDC/C1503012/NGP/FLY/NHAI/2251 dated 05.03.2022

2.Authority Email dated 27 .11.2021
3.NHAI/F&A/IA/2019-20/GST Audit Reports/5586 dated 22.11.2021
4. GDC/C1503012/NGP/FLY/NHAI/2792 dated 12.08.2022

Dear Sir,

We have been awarded this contract vide LOA No. NHAI/Tech/MH/Nag/2014/76071 dated
28.12.2015. As per clause 19.1.2 the total contract price is inclusive of all the taxes as applicable
in pre-GST regime i.e. Excise duty, VAT etc.

After introduction of GST from 01.07.2017 this work has been wholly taxable under GST rules
and we were liable to pay GST @ 12% on the work done amount as per bill. Due to change in tax
law, the tax payable on the project has increased as compared to the previous tax regime under
which we had submitted the tender.

In this regard we have submitted the cost implication as per clause 19.17 of contract agreement in
the NHAI prescribed format vide letter under reference 1, and accordingly NHAI appointed
special GST Auditor for finalization of additional impact due to implementation of GST. Vide
letter under ref 2; NHAI conveyed the recommendation of special GST Auditor, which
recommended an additional impact of 4.73% due to change in tax regime. Details of the
recommendation by Special Auditor are as under:

 Total value of contract = Rs. 448,31,54,716/-

 Physical work completed before GST regime up to 30.06.2017 as per certification of
Authority Engineer= Rs.370039353/- (Bill Certified Rs. 11,76,82,929/-)
 The balance value of contract to execute post GST regime = Rs 4113119847/-.
 The cost of Pre GST taxes for balance work (excise duty, VAT, CST etc.) = Rs.
266856257/-
  Percentage of Pre GST taxes = 6.488%
 Revised Value of Project Cost = Rs 3846263590/-
 Amount of GST payable @ 12 % = Rs 461551631 /-
 Total Project Cost including GST = Rs 4307815221/-
 Impact of additional amount due implementation of GST = Rs. 194695374/-
 Impact of additional amount due implementation of GST in % = 4.73 %

Further as per Govt of India Finance Ministry Notification 03/2022 dated 13.07.2022 and RCM
Notification 05/2022 Central Tax rate, GST rate has been revised from 12% to 18% with effect from
18.07.2022 which is applicable for our project under contract clause 19.17 of contract agreement
under Change of Law and same in informed vide letter under ref 4.

As on 17.07.2022 i.e. before the change in GST rate, certified works are in tune of Rs 2639789184/-
(Certified from IPC-03 to IPC-40) for the period 01.07.2017 to 17.07.2022. Hence for balance value
of works amounting Rs 1473330663/- GST @ 18% will be applicable, whereas pre GST taxes
deducted @ 6.488% as per recommendation of special GST auditor. Please find hereunder details of
overall impact due to implementation of GST w.e.f 30.06.2017 and revision in GST rate 18.07.2022:

WD
Balance Works
July'2017 to
WD up to after 17th July
Sr. 17th July 2022 Total Project
Description June'2017 2022 (GST -18% Remark
No. (GST -12 % Cost
(Pre-GST) From IPC - 41
from IPC-03
onwards)
to IPC-40)
Value of Work up
1 Value Of Works 370039353 2639789184 1473330663 4483159200 to 30.07.2016
certified from AE

% of Factored Taxes
2   6.488% 6.488%    
(Pre GST Taxes)

Total Value of
Pre-GST Taxes
Certified by
Value of Factored Taxes
3   171269522 95586735 266856257 Special Audit
(Pre GST Taxes)
Committee of
NHAI amounting
Rs 26.69 Cr.

4 Net Workdone 370039353 2468519662 1377743928 4216302943  

5 GST % 12.0% 18.00%

 
6 Value of GST Paid 296222359 247993907 544216266.4  
Total Cost Including
7
GST
370039353 2764742021 1625737835 4760519209  
Additional Amount to
8 be paid due to Change 124952837 152407172 277360009  
in Law  
% of Additional
Amount to be paid
9
due to Change in
4.73% 10.34% 6.19%  
Law  
In view of the above, we request your goodself to verify the above details and recommend the
additional reimbursement @ 10.34 % from IPC-41 onwards under Clause 19.17 change of law of
contract agreement against revision in GST rate w.e.f. 18.07.2022

Thanking you and assuring our best services at all times.

Yours Sincerely

For GDCL-SMSIL JOINT VENTURE

(Ranjit Wahi)
General Manager

Encl: 1. NHAI Email dated 27.11.2021

2. Annexure -1 Recommended by GST Auditor

CC: 1. Project Director PIU-1 NHAI Nagpur

2. F & A Unit RO Nagpur