GST reduction on metro construction materials will give some relief to Metro construction companies
With the rate of the Tax on Goods and Services (GST) on the construction of the metro and the monorail going down to 12 percent from 18 percent, EPC (engineering-procurement-construction) contractors in space would benefit provided their contracts they will be tendered taking into account the fiscal component. Essentially, if the EPC contractor had submitted an offer for the metro or monorail construction contract on the base price without taxes, then the decrease in the GST slab would prove to be an advantage for the company since the overall cost would decrease. However, if the contract was tendered, including the tax component, the final cost would remain unchanged. According to experts, some of the contractors who were under stress due to higher costs would get some relief. “This is a positive step in many aspects for the industry, first, the Capex for projects will be reduced, and second, there will be a significant reduction in working capital, since less funds will be block...