GST: Renegotiation of contracts for engineering firms on cards

Sources said the industry faced issues over input and final product tax computation

Engineering companies face transition issues related to inputs and for signed but pending contracts. Engineering and construction projects are long-gestation projects, where contracts and the price of the final product are decided before work starts.

There will be a need to revisit many of these contracts since the framework for interstate sales, the C Forms, will disappear. 

“Similarly, with service tax being replaced by the GST, the full offset for inputs like cement and steel will have to be reworked,” said Vimal Kejriwal, managing director and chief executive officer, KEC International.

Sources said the industry faced issues over input and