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When the price quoted on a GeM invoice for manpower services is inclusive of a 3.85% service charge which is itself inclusive of GST, you must perform a reverse calculation to determine the base service charge amount and the embedded GST amount (typically at an 18% rate).How to Deal with Inclusive GST in GeM InvoicesThe 3.85% is a minimum service charge percentage inclusive of GST, mandated by DoE guidelines for GeM manpower service bids. The standard GST rate for contractual manpower services is generally 18%.To separate the base service charge from the GST amount, use the following formula:Formula to calculate the actual (pre-GST) service charge amount:\(\text{Actual\ Service\ Charge\ Amount}=\text{Total\ Inclusive\ Amount}\times \frac{100}{(100+\text{GST\ Rate})}\)In your case, the "Total Inclusive Amount" is the value of the 3.85% service charge component and the GST rate is 18%.Example Calculation:Let's assume the total contract value (wages + service charge) on which the 3.85% is calculated is ₹100,000.Calculate the total service charge amount (inclusive of GST):₹100,000 * 3.85% = ₹3,850Calculate the base service charge amount (pre-GST) from the inclusive amount (₹3,850):₹3,850 * (100 / (100 + 18)) = ₹3,850 * (100 / 118) ≈ ₹3,262.71Calculate the actual GST amount embedded in the service charge:₹3,850 - ₹3,262.71 ≈ ₹587.29(Alternatively: ₹3,262.71 * 18% ≈ ₹587.29)Action Steps for GeM InvoicesCoordinate with the Buyer: GeM terms often require the bidder to submit their offer inclusive of GST and mention the GST percentage. The buyer usually assumes the quoted price is inclusive if not specified otherwise. Clarify the breakdown with the buyer if the system requires separate entries.Generate the Invoice on GeM: When generating the invoice on the GeM portal, the system often has an in-built mechanism to handle the inclusive pricing and may allow for entering the GST rate.Ensure Supporting Documents Match: The details on the system-generated GeM invoice should match your own supporting GST tax invoice and attendance/log sheets. If they do not match, the invoice may be rejected.Submit Correct Breakdown: Ensure your commercial offer and subsequent invoices clearly state the GST rate and provide the correct breakdown of the base value and the GST component as per the above formula, so the buyer can process the payment and claim Input Tax Credit (ITC) correctly.Relevant YouTube Hashtags#GeMInvoice#GSTCalculation#ManpowerServicesGST#InclusiveOfGST#GSTIndia#GeM_portal#GovernmentMarketplace#TaxCompliance#GSTforServices#ManpowerOutsourcing#EInvoicing#IndianTaxation#GeMTenders