SRINAGAR: The Finance Department of Jammu and Kashmir has directed all government departments and agencies to ensure that payments to contractors and suppliers are made only to bank accounts linked with their GSTIN.
According to an official circular, the GST paid by the government on goods and services received from various suppliers and contractors forms a significant revenue source for the Union Territory. “Under Section 51 of the CGST Act, 2017, and the J&K GST Act, 2017, tax is deducted at the rate of 2% (1% SGST and 1% CGST) from payments made or credited to suppliers for taxable goods or services, where the total contract value exceeds ₹2.5 lakh.”
Drawing and Disbursing Officers (DDOs) are required to file monthly returns in Form GSTR-7, which enables tracking of returns filed and tax paid by suppliers. Additionally, Rule 10A mandates that registered taxpayers furnish their bank account details after obtaining GST registration in Form GST REG-06.
However, the Finance Department observed that in many cases, the bank account details provided at the time of contract allotment are not linked with the contractor’s GSTIN. “This discrepancy hampers effective monitoring of transactions and may result in revenue loss to the state exchequer. To address this, the government has now made it mandatory that all payments be made only to bank accounts linked with the contractor’s GSTIN.”
To ensure compliance and transparency, the circular directs that all government departments and organisations must incorporate this condition in the e-tendering process. “Every participating supplier or contractor must mandatorily disclose the bank account number linked with their GSTIN at the time of bid submission. No payments shall be released to any other bank account,” the circular reads.
All departments have been instructed to immediately update tender documents and bid conditions to reflect this requirement. Payments to successful bidders are to be made strictly to the verified GST-linked bank account disclosed during the bidding process.
The circular further directs all Heads of Departments, PSUs, autonomous bodies, and agencies to ensure strict compliance with the instructions in letter and spirit.
