Metro construction companies could offset increased cost with lower GST

Larsen and Toubro is building Rs 160-bn metro rail project

With the Goods and Service Tax (GST) rate on the metro and monorail construction being brought down to 12 per cent from 18 per cent, the EPC (engineering-procurement-construction) contractors in the space would get benefited provided their contracts were bid out factoring in the tax component.

Essentially, if the EPC contractor had bid for the metro or monorail construction contract on base price excluding taxes, then the decline in GST slab would prove to be an advantage for the company in as the overall cost would decline. However, if the contract was bid out, including the tax component, the end