Tamil Nadu to bring in guidelines on government work contracts post GST

GST rate on works contracts for government work to be reduced to 12% from the previous 18% rate

The Tamil Nadu government has decided to bring in new guidelines related to government work contracts after the Goods and Services Tax (GST) regime came into force in July. Due to a lack of clarity in some of the rules, payments to contractors for ongoing works has been held back by the authorities after GST. The government has asked the departments to settle these amounts "on account" as it has started affecting the projects.

The state government is also examining the full implications of the GST on works contracts and government procurement. The Public Works Department and Highways Department are in