Humble request to Experts for clarification on the issue of Tax applicability Clause:
Ours is a small scale MSME laboratory established by unemployed Graduate Brothers in Vizag district running on shoe-string budget. We were awarded AMC work by one institution during Dec 2020. Against submission of 1st Quarterly Tax Invoice, the approving authority replied that “As per the Agreement Page no: 38 &39 All quoted rates are inclusive of GST and the same were accepted by you. In this regard kindly submit the revised invoice with inclusive of GST Amount”.
In order to facilitate, kindly find below the contents of pre-existing factors for your kind perusal.
PAGES 38 & 39 SIGNED TECHNICAL DOCUMENT COMPRISING PRICE SCHEDULE
Sl. Item Descrip- Qty Units Rate inclusive Total Amt inclusive Total Amt tion of all taxes of all taxes in words
BOQ TEMPLATE PRICE SCHEDULE (This BOQ template must not be modified/replaced by the bidder and the same should be uploaded after filling the relevant columns, else the bidder is liable to be rejected for this tender)
Sl. Item Descrip- Qty Units Estima Basic Rate Total Amt Total amount tion ted Rate in fig to be Without in words entered by taxes in the Bidder Rs. P
During this pandemic situation services rendered for “EXCLUSIVE OF TAXES“ would become a great blow on our financial stature. It may kindly be noted that Technical Bid document page 6 wherein it was indicated that “ Please note that Rates should not be quoted in the Technical Bid. Only Commercial Bid should indicate rates and should be uploaded on e-procurement portal."
Learned Experts are requested for issue of suitable directions since Rates Quoted on the basis of BOQ Price Schedule (without Taxes) Clause. Your valuable directions not only helps us to come across financial crisis but also helps us to render services without any encumbrances.
Look forward to receiving your valuable suggestions. Thanking you Sir, in advance.
Thank you for your query regarding the taxation clause in the AMC agreement and the BOQ (Bill of Quantities) template provided by the institution. Based on the information provided, it appears there is confusion regarding whether the quoted rates should be inclusive of GST or exclusive of taxes. Here are some clarifications and suggestions:
1. **Technical Price Schedule vs BOQ Template Price Schedule:** - It seems there are two different documents involved: - **Technical Price Schedule** (Pages 38 & 39): This document shows rates inclusive of all taxes. - **BOQ Template Price Schedule**: This template may have a clause stating that rates should be quoted without taxes.
2. **Contractual Obligations:** - According to the approving authority's response, they have interpreted the agreement to mean that all quoted rates should include GST. This is based on their reference to pages 38 & 39 of the agreement where rates are shown as inclusive of taxes.
3. **Submission of Revised Invoice:** - Since the approving authority has requested a revised invoice inclusive of GST, you are obligated to comply with this requirement as per their interpretation of the agreement terms.
4. **Financial Impact:** - Services rendered "exclusive of taxes" during the pandemic situation could adversely affect your financial standing. Therefore, it is crucial to adhere to the contractual terms regarding tax inclusivity to avoid any financial strain.
5. **Seeking Clarification:** - To proceed further, consider seeking clarification directly from the institution regarding the interpretation of the taxation clause. Request a clear explanation of which document (Technical Price Schedule or BOQ Template) should govern the tax applicability.
6. **Legal and Contractual Adherence:** - Ensure that any revised invoices or submissions align with the institution's interpretation of the contract to avoid disputes or delays in payment.
7. **Professional Advice:** - It may be prudent to consult with a legal or tax advisor who can review the contract terms and provide specific guidance based on the laws applicable to your jurisdiction and the terms of the agreement.
In conclusion, while your concern about financial strain is understandable, adherence to the contractual terms, as interpreted by the institution, is necessary to maintain compliance and avoid any legal or financial repercussions.
CAclubindia
