GOVERNMENT OF INDIA
MINISTRY OF RAILWAYS
|NO. 2001/CEI/CT/1 |
New Delhi, dated 07/07/2004.
(AS PER LIST ATTACHED)
Subject ? Report of the Committee on issue of Earnest Money and Security Deposit from Public Sector Undertakings (PSUs)
A Committee of 3 EDs viz. EDRS (G), EDF (S) & EDCE (G) was nominated to make recommendations on the issues of Levy/Waival of Earnest Money and Security Deposit from PSUs. Accordingly, the Committee have gone through the existing instructions on the subject & practice being followed in other major Government departments in detail and submitted its recommendations which have been approved by the Board (ME, MM, FC).
The recommendation concerning to the works contract is given below -
?In works contract, no general exemption for Earnest Money & Security Deposit is to be given to the PSUs. However, for the units which are wholly owned by the Railways like RITES, IRCON, Konkan Railway Corporation Ltd. CRIS, Rail Tel Corporation etc., exemption may be given both for Earnest Money and Security Deposit.?
The recommendation in connection with Stores contracts would be separately circulated by the Stores Directorate.
The above recommendation would be applicable with prospective effect and will preclude contracts, which have already been entered into or have been called and are under process of finalization.
This issues with the concurrence of the Finance Directorate of the Ministry of Railways.