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Increased rate of Excise

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Querist : Anonymous

Querist : Anonymous (Querist)

31 December 2010 Terms of Agreement: All tendered rates shall be inclusive of all taxes and levies payable under respective statutes. However, pursuant to the constitution (46th Amendment) Act, 1982, if any further tax or levy is imposed by statute after the last stipulated date for the receipt of tender including extensions, if any and the contractors thereupon necessarily and properly pays such taxes/levies, the contractor shall be reimbursed the amount so paid"

Query: Whether contractor can claim the increase in excise duty from 8.24% to 10.30% as per Union Budget 2010-11 with reference to above terms of agreement

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)

31 December 2010 Additional tax is not payable , since rates are inclusive of tax. Since service tax was applicable on the date of submission of tender documents, no additional amount is payable.

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