Circular Subject: Standardized list of Documents required for SCs Bills submission
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1 Process Impacted RTP Services ( RTPS 39) Circular Subject: Standardized list of Documents required for SCs Bills submission Solutions Implemented Reference CIR/S&PI/ Effective Implementation The document requirement check-list for processing the bills provided to all billing engineers (Check List attached below) While submitting the bill, the billing engineer to ensure completion of the documentation as per the defined check-list by SSC Existing Process Process Modification New Process Number of queries are being asked at the SSC during bill processing due to incomplete documents The site realizes the same, once the SSC receives the bills and raises queries Billing engineers are well informed on the documents required for each of the Bills. Billing engineer to ensure that all the documents are attached as per the check list circulated before submitting to SSC. Clarification mails are being exchanged to get the issue resolved and delays the process Benefits Clarity on requirement of documents Faster process with fewer rejections, resulting in Lead time Saving
2 Check - List for SC bill processing I. Key points for Work Order creation Key points to be followed at the time of creation of Work Order in EIP is given below: 1. Immediately on issue of LOI or on finalization of Sub-contractor / Service Providers, Work Orders need to be prepared in EIP. Delay in preparation of EIP Work Order (WO) may lead to delay in payment. 2. Ensure One Work Order for One Sub-contractor / Service Provider. However, if following parameters are changed, user can issue different WO instead of amending the existing WO. a. Statutory parameters like IT TDS section, WCT applicability, Service tax applicability, etc. b. Commercial conditions like Payment terms, Performance Bank Guarantee clause, Advance clause, Liquidated damages clause, Retention clause, etc. 3. Please select correct Vendor Code / Branch Code. Incorrect selection of Vendor Code will leads to payment to some other Vendor / Sub-Contractor. Hence, please take necessary care. 4. Ensure PAN and Service Tax registration numbers mentioned in Vendor Master are correct and valid. If it is having the error, please correct the same through Resource Department. 5. Enter brief description of work and LOI references in respective field in EIP Work Order. 6. If LOI is not issued, while creating work order in EIP, in LOI / LOA field please mention No LOI / separate Terms & Conditions are issued. Further in remarks column site has to mention following details: i. Applicable Retention % ii. Whether PF coverage is in SC s responsibility or not. iii. Whether ESI is applicable in the work area or not. iv. If ESI is applicable, whether ESI coverage is in SC s responsibility or not. v. Advance Recovery Clause, if applicable. vi. In case of With Material Work Order, requirement of local TIN reference of State in which work is being executed. vii. Special payment terms, if any.
3 7. LOI / detailed terms and conditions are mandatory for all WOs issued to Specialized agencies, Professional service agencies, With material contractor, etc. This will help SSC for bill processing and to attend internal / external audit queries. 8. Even in case of labour contractor, if LOI or any other special terms and conditions are issued, please upload the same in EIP as Employee and Business Associate document, failing which, SSC may not aware of those terms and conditions. It means, SSC cannot check the compliance of those terms and conditions. 9. Committee Approvals are mandatory for all WOs. As per DMD circular all committee members are to approve the same. Upload Committee Approval as Employee document & don t upload as Employee and Business Associate document. Please note, the documents which are loaded as Employee and Business Associate document can be viewed by Sub-Contractor. 10. In case of High Power Committee approved Work Orders, if any amendment is made in terms and conditions (like changes in PBG clause, Retention clause, Time extension clause, Payment terms etc.), the same needs to be approved by HPC. Unless the amendment is approved by HPC, SSC will not consider those revised terms and conditions for processing & payment. 11. Payment terms once selected cannot be amended. Hence, while creating the Work Order please select payment terms in line with LOI (i.e. the agreed terms with the Sub-contractor / Service Provider). Due dates are getting calculated based on payment terms. 12. In case of Recoverable Advance, please select appropriate advance payment terms. If advance is payable against Bank Guarantee; then WO creator has to select payment terms as Advance payable against Bank Guarantee. 13. If Work Order is having stage payments, please ensure the same is correctly selected in EIP WOR. Please note, Advance should not be entered as Stage. Excluding Advance and Retention, sum of all stage % should be 100. Further please note, Stage % is only for the purpose of Cash Flow and not to be treated as Item Rate. 14. As Work Order Type will define the approval work flow, it should be selected as per guidance note of System Team (ISD). Further, Account Head (i.e. Account Code) is automatically selected by software based on Work Order Type and Item Codes. Hence, appropriate Work Order Type and Item Code should be selected as per guidance note of System Team (ISD). 15. All hiring of Plant and Machinery should be routed through Asset Management System (PHRS). On approval of PHRS, system will automatically generate Hire Work Orders. Please ensure all parameters are correctly selected in PHRS.
4 16. PHRS Work Order needs to be prepared well before the Hiring period. 17. If Unit of Measurement (UOM) is Lumpsum, please upload duly approved workings (calculation details) for the same. Measureable Work should not be paid under Lumpsum. 18. In case of With Material Contract, against each item code please mention the VAT component separately. If you include the VAT component in basic rate, Service Tax amount will be calculated on VAT component also. 19. If VAT component is reimbursable, please create separate item code. For this item, Service Tax category will be Not applicable. 20. In case of With Material Contract ensure agency is having Local VAT Registration. If agency is not having Local VAT Registration, VAT component should not be included in the work order. (i.e. agency should have VAT registration number of State in which work is being carried out). If CST component is included Local TIN is not required. 21. Please select appropriate Service Tax category for each line item of EIP WO. Please don t include Service Tax component in Basic rate. Even if the job is not eligible for Service Tax input credit, please don t create separate item code for Service Tax component. In case of any guidance required for selecting the Service Tax category, please contact your Regional Indirect Tax Coordinator or IC Indirect Tax Co-ordinator. 22. Please ensure to select appropriate options w.r.t Chargeable issues by L&T. 23. As we have to pay VAT for chargeable issues, please ensure the same is included in recovery rate. Also please ensure agreed overhead is included in recovery rate. 24. As L&T is already holding Insurance coverage for all workmen engaged in the project, please don t factor cost towards Workmen Compensation Policy in item rates. It means Workmen Compensation Policy should not be included in SC s scope. Also please ensure any other insurance policies, which are already covered by L&T, are not included in SC s scope. 25. Please ensure WO period in EIP is in line with agreed conditions of the contract / LOI. 26. If Work Order is having Liquidated Damages (LD) clause, please ensure completion date for the contract is correctly selected in EIP. Also select effective date for LD recovery. Please note Effective date for LD recovery should not be equal or less than the contractual completion date (i.e. Work Order TO DATE ). 27. If Performance Bank Guarantee / Retention Bank Guarantee are applicable, please mention the same in EIP WO and also select Defect Liability Period (DLP).
5 28. In LOI / Terms & Conditions, please ensure Liquidate Damages (LD) clause, Defect Liability Period (DLP) clauses are clearly mentioned without any ambiguity. 29. If the work order is having incentive / bonus clause, please ensure the target quantity & period are clearly specified in the LOI / Terms & Conditions. II. Key points for Work done certification Work done certification is the key area for Sub-Contractor Bill processing and request to take care of following important points. 1. Ensure work done certification is incorporated in EIP with clear dimensions (L B H) against correct Work Order. Please mention Area of work (like chainage, name of building, location, floors, etc.) in description field. 2. Ensure EIP bill period is correctly selected. (Please note based on this period, system will calculate applicable rate of Service Tax and Liquidated Damages). 3. Staff who enters & approves the work done in EIP (i.e. user ID through which the said activity is done) is solely responsible for accuracy of data and period. 4. In case of bill towards Regular Supply Workmen, it should be supported by Pay Sheet Summary, duly certified by Time office & Accounts. Please upload the excel file, which contains wages calculation. 5. If other than Regular Supply Workmen are billed on head count basis and if the WO value is more than Rs.10 L, please get the IC / BU F&A approval. As manpower supply payments are not directly proportionate with productivity, approval from IC / BU is required. 6. In case of inter-carting of materials (within the site premises), summary of date-wise, vehiclewise trips is to be certified by Site in-charge and Planning Engineer. 7. In case of P&M hire, Vehicle hire, daily log sheet details should be certified by concerned staff / EIC and fuel consumption should be within the norms. 8. Normally if P&M hire period exceeds 12 months, Mobilisation and Demobilisation charges are to be accepted by Hiring Agency (contractor). In such case, if mobilisation charges are already paid, please recover the same. 9. In case of rental payments, please ensure that the lease agreement is valid and singed by IC F&A Head.
6 10. Normally Stage Payment will be sequenced in line with physical activities of particular work scope. Hence at any point of time, cumulative quantity billed in current stage (for example stage 2) should not be greater than cumulative quantity billed in previous stage (in this case stage 1). 11. Stage Payments are only for cash flow and not to be considered as item rate for given stage. For example, if Contractor A has executed the work upto stage 1 and left from the project site. Subsequently, Contractor B is engaged to do Stage 2 activity. While doing the billing for Contractor B, separate item rate is to be created. 12. In some work orders, few Items will have the co-relation. Examples for items having corelation are given below: i. Removing of shuttering will have the co-relation with Fixing of shuttering. ii. Tying of reinforcement will have the co-relation with Cutting and bending of reinforcement. iii. Excavation in the depth from 6 Meter to 8 Meter will have the co-relation with Excavation in the depth upto 2 Meter and Excavation in the depth from 2 Meter to 4 Meter. In these cases, at any point of time, cumulative quantity billed are in line with the sequence of activities. 13. Normally, mobilisation charges for labour is payable only if they worked in that project site for Minimum Agreed Period. The duration of work is to be certified by Industrial Relation Officer (Time Office). 14. In case of reversal of work certification, please provide the reason for the same. In case of rate revision with retrospective effect, enclose such approval of competent authority. 15. If the work done period (Bill TO DATE ) is more than Six months old, please mention the reason for such abnormal delay. Such delayed payment needs to be approved by respective CPM / CAM. 16. Obtain Vendor Invoice for all bills, as acceptance of work done. Even though the agency is pure labour contractor or unregistered under Service Tax and the agency does not have any preprinted invoice book, it is mandatory to obtain the invoice in their letter head with seal and signature of authorised person. In case of Project sites, Project Accountants are requested to ensure that only authorized person are signing the Vendor Invoice.
7 17. Scan copies of all supporting documents (i.e. Vendor Invoice, Bill Deduction cum Payment Clearance Certificate, Log Sheet Summary, Pay Sheet Summary, Project Accountant s certification for releasing rental payments, material reconciliation, any other specific document as per contract) are to be uploaded in EIP along with bill. These documents can be uploaded during Bill deduction creation, so that Bill date / system due date will not change. 18. Staff who uploads the scan copies is responsible for maintaining Original. Hence, before uploading the scan copies in EIP, he has to ensure that original document is available with them. 19. Site / Planning Engineer have to check and certify the Monthly Material Reconciliations submitted by the Agency. The Material Reconciliation statement is to be enclosed along with the Bill. 20. If as per LOI / WO conditions scraps (like steel scraps, empty cement bags, empty barrels, etc.) are to be returned by agencies, in Material Reconciliation statement, please mention the quantity of scrap returned by SC also. 21. If payment term is containing advance payment, during measurement approval Advance icon will be in active mode. To pay advance, site will enter the positive value and to do recovery, site will enter the negative value. 22. Wherever applicable, please attach Client certification for quantity billed to SC, Proof for payment received from client, etc. 23. If Service Tax invoice submitted by the Sub-Contractor is more than one year old (based on date of invoice), as L&T cannot avail the Cenvat, approval from IC F&A Head is to be obtained and to be uploaded along with bill. 24. In cases of idle wages approval from Cluster Project Manager / Cluster Accountant is required. If cluster is not available or in case of TFL job, BU approval is required. 25. In case of extra ordinary idle hire charges, approval from Cluster Project Manager / Cluster Accountant is required. If cluster is not available or in case of TFL job, BU approval is required. 26. In case of With Material Contractor, if certain basic materials (other than consumables, small tools) are provided by L&T on free issue basis or on chargeable basis, please prepare the Material Reconciliation Statement. 27. Material Reconciliation Statement should contain quantity issued, quantity actually consumed, stock, theoretical consumption as per standard norms, actual wastage, allowed wastage, recovery for excess consumption or excess wastage. Statement should be duly signed by Store Keeper and Planning Manager.
8 28. In case of labour contractor, if as per WO conditions agency has to submit any Material Reconciliation Statement, then while sending the bill for processing please attach the same also. If not specified in WO, Material Reconciliation Statement is not required for labour contractor. 29. If as per LOI / WO conditions, scraps (like steel scraps, empty cement bags, empty barrels, etc.) are to be returned by agencies, please verify whether scrap quantity returned are in line with the Material Reconciliation Statement. 30. If industrial gas cylinders are being issued by L&T, ensure agency has returned the empty cylinders. 31. If material issue rate is not specified in the WO, please effect the recovery at the rate of cost plus 20%. III. Key points to verify before issuing Bill Deduction cum Payment Clearance Certificate : Before issuing Bill deduction cum Payment clearance certificate, Project accountant has to check the compliance of statutory requirements and compliance of basic commercial conditions of the contract. If it is checked / ensured by project, query from SSC can be avoided. 1. If Contractual Performance Bank Guarantee (CPBG) is not submitted within the time specified in LOI / WO terms and conditions, before effecting any payment (including advance payments) SSC will withhold the entire PBG amount. Hence, please ensure CPBG is submitted. 2. Ensure the agency has submitted all statutory records. 3. If Workmen Compensation is in SC s scope, obtain the copy of WC policy. In WC policy the place of work, number of workmen, nature of work and validity needs to be checked. Please note, if not submitted SSC will recover 1% of bill value and credit the same to job. 4. If PF / ESI are in SC s scope, collect the relevant challan from agencies and ensure the same is in line with workmen engaged by them. 5. In some cases, even though PF / ESI are in SC s scope, the same will be covered through L&T s code. In such cases, employer and employee contributions are to be recovered from the bill. 6. If royalty is in SC s scope, please ensure royalty challans are collected for materials brought in by them. In case of non-compliance, in Payment Clearance Certificate, please mention the amount to be kept under hold.
9 7. Ensure Material Reconciliation Statements are prepared and recoveries towards excess consumption, abnormal scrap are done. 8. Ensure recoveries towards non-returning of scrap (like steel scraps, empty cement bags, empty barrels, etc.) are effected in the bill. 9. Ensure all debit notes are accounted in the bill. If material issue rate is not specified in the WO, please effect recovery at the rate of cost plus 20%. 10. If as per WO condition, quantity payable after client certification (i.e. after certification of L&T s bill by Client (Principal employer)), please attach the confirmation along with bill / measurement. 11. If as per WO condition, payment has to be made only after receipt of payment from client, please get the confirmation from respective IC accounts and attach the same along with bill. 12. Even in cases pure labour contractor or unregistered agency under Service Tax or the agency does not have any preprinted invoice book, it is mandatory to obtain the invoice in their letter head quoting their PAN ref with seal and signature of authorised person. Tax Invoice is mandatory for payment to Company (Public / Private Ltd) Specialized Agency, With Material Contractor, Professional Service Agency, bills having Service Tax / VAT / WCT component. Check following parameters in tax invoices: i. Ensure it is Original Tax Invoice. Don t process the bill based on Proforma invoice / extra copy / duplicate / quotation / estimate. ii. Whether invoice is billed in the name of Larsen & Toubro Limited. iii. Whether Project name is specified in the Tax Invoice. iv. Whether nature of service is mentioned in the Invoice. v. Whether Quantity, Rate and Value of all activities are mentioned in the Invoice. If Items are more, Vendor can provide details in annexure. vi. Whether VAT registration number (TIN ref) is mentioned. Ensure that vendor is having local tax registration. First two digit of the TIN will represents the state in which the organization is registered. Refer enclosed list for state-wise codes. (Applicable for With Material Contract ). vii. Whether Service Tax registration number is mentioned. Ensure first 10 digits of Service Tax registration number and PAN are tallied.
10 viii. Whether the PAN reference is mentioned in the Tax invoice. PAN reference which is mentioned in Tax invoice should tally with EIP bill. ix. Whether invoice is properly numbered and dated. x. Whether the invoice is sealed and signed by the authorized signatory. xi. Whether Service Tax component including cess is mentioned separately. If Service Tax & cess components are not separately mentioned, L&T is not entitled to avail Cenvat Credit. xii. Ensure vendor invoice is not more than one year old. If it is more than one year old & if the project is eligible to avail the Cenvat credit, IC F&A approval is required to charge off the Service Tax as cost. xiii. Whether invoice date is after the EIP Bill TO Date. 13. If SC is doing Works Contract Service and Service Tax is paid on abatement scheme, please ensure Value of free issue of material is considered for computation of Taxable value. 14. As per recent decision of Corporate Indirect Tax Department, Service Tax is payable on production of Tax Invoice and if Service Tax registration number is active. 15. In case of With Material Contract, please recover appropriate WCT TDS %. WCT TDS is based on following parameters: i. State in which work is executed ii. Work scope (i.e. civil work and other than civil work) iii. Nature of contract (i.e. Contract or Sub-contract) iv. Dealer status (Registered or Unregistered dealer) v. Work Order value vi. If advance recovery is operated in the particular running bill, ensure WCT TDS is effected on work done (i.e. Gross bill value + Advance recovery) 16. If agency is not having Local VAT registration and Local VAT component is included in the WO, please Hold amount equivalent to tax component. On subsequent submission of Local VAT registration and VAT invoice, Project Accountant has to send Withheld Release Certificate specifying the amount to be released. Based on this document, SSC will release the same.
11 State code for VAT registration State First two digit Jammu & Kashmir 01 Himachal Pradesh 02 Punjab 03 Chandigarh 04 Uttranchal 05 Haryana 06 Delhi 07 Rajasthan 08 Uttar Pradesh 09 Bihar 10 Sikkim 11 Arunachal Pradesh 12 Nagaland 13 Manipur 14 Mizoram 15 Tripura 16 Meghalaya 17 Assam 18 West Bengal 19 Jharkhand 20 Orissa 21 Chhattishgarh 22 Madhya Pradesh 23 Gujarat 24 Daman & Diu 25 Dadra & Nagar Haveli 26 Maharashtra 27 Andhra Pradesh (Now not valid) 28 Karnataka 29 Goa 30 Lakshdeep 31 Kerala 32 Tamil Nadu 33 Pondicherry 34 Andaman & Nicobar Islands 35 Telangana 36 Andhra Pradesh 37
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