THIRUVANANTHAPURAM: Government contractors are paying the price for the lack of transparency in public works as non-compliance with tax rules have attracted penalties. The GST regime has rendered service tax as no longer applicable. Hence, the contractors were supposed to register for VAT and service tax and pay service tax before GST was implemented. Those who fail to comply would be issued a notice for non-registration and non-payment of service tax.
However, according to the Government Contractors’ Association, they were not aware of the service tax rules because the tendering government agencies neither mentioned taxable service in the tender notices nor refunded the share of service tax deposited by the contractors, resulting in a non-compliance culture.