According to the previous provisions, a works contract is a combination of the transfer of goods and services. While under the GST regime, the service tax is applicable for work contracts only on the service part. As per the listings, the construction of the building, maintenance, and repairing of plant and machinery, and installation, repair, and alteration of any movable or immovable property come under a works contract.
Previous Taxation System for Works Contract
According to the old law, a works contract is composed of three types of taxable activities which include the supply of goods and also the supply of services. If a new product is manufactured under the work contract, then such a product is taxable.
Whereas, VAT or sales tax levied on the transfer of property in goods pertains to carrying out a work contract while Service tax will be applicable only on the services portion involved in the execution.
Latest Update
15th September 2022
- Authority of Advance Ruling of Karnataka has been ordered to 12 per cent GST applicable on services of work contract associated with the making of a police station undertaken by Karnataka Housing Board. Read more
- The GST AAR Telangana has issued the order under section 98(4) rule 104 of CGST/TGST for M/s. Satya Dev Bommireddy. Read more
Works Contract and Its Provisions under GST India
GST Schedule II clearly announced that the following points consider under the supply of service:-
- it includes all the works related to the construction of a complex, civil structure, building or a part thereof, which also includes a complex or building tagged for sale to a buyer, wholly or partly,
- secondly, the works contract included in the transfer of property in goods (whether as goods or in some other form) involved in the completion of a works contract
But as under the GST Regime “One Nation, One Tax” has taken the place of the confusion related to the tax practices. Which says that the works contract will be considered under services and taxes would be deducted accordingly (not as goods or part goods/part services).
Under the current taxation structure, the states are having different VAT schemes and different composition schemes for different VAT rates. And this procedure of works contract as service and not as a supply of goods would bring confusion among users which requires more clarification & answers to the work contracts. Also according to the recent government announcement of the tax rates, it is known that service tax is very tedious with 60% abatement on new works contracts and 30% abatement on repair contracts.
Recommended: GST vs VAT: Simple Way to Describe the Differences
Determine Time of Supply for Works Contract:
For determining the works contract date earliest, section 13(2) includes the time of supply points to be considered which are:
- The date on which the invoice is issued by the supplier or the final date on which it is required to issue. Generally, it is within 30 days from the completion of the works contract
- The receipt containing the date of payment or the date on which the payment is credited to the account by the supplier
- The date earlier from the above is a considerable first
- If the invoice is not generated in the starting, then the date of completion of the services is considered
Place of Provision: The Origination of Supply
The place of service determines in which jurisdiction the particular works contract comes into. The place of provision(POP) is informed based on the supply of immovable property and other than immovable property.
1. Supply Of Services Of Immovable Property
According to section 9(4) of the IGST act, the Place of a provision in the case of immovable properties is where it is situated regarding the services of:
- Architect
- Surveyors
- Engineers
- Estate agents
- Interior decorators
- Coordination services for the construction work
2. Supply Of Services Of Other Than Immovable Property
If the supply is made to a registered person, then the place of supply will be the location of the recipient of services
If the supply is made to an unregistered person, then the place of supply will be the location of the recipient or in other case location of the supplier.
No Availability of Input Tax Credit
The new GST Regime has declared that input tax credit is not available for:
- all the works contract at the service supply for constructing an immovable property, excluding plant and machinery, except where it is an input service for the further supply of works contract service
- goods or services accepted by a taxable person for constructing immovable property with his own account, excluding plant and machinery, even when used for use in the course or furtherance of business.
Looking at the example, if in case, a builder or contractor is not entitled to get ITC at the time of under construction of the project but he can avail ITC for the input services at the time of supply under the works contract. This sentence creates confusion regarding the provision.
No description of Abatement
While the abatement is not under the laws of works contract, the current tax laws provide service tax at 15% and are divided into 2 categories i.e. 40% for the new work and 70% for the maintenance and repairing work.
The government has now revised the GST rates on works contracts to 12 per cent, however, this new rate is only for the work contractors. And other than this, the buyers will have to pay 12 per cent GST on the affordable housing plans along with the ITC claim. According to the calculations, the 18 per cent GST is only applicable on the two third of the total house value which in turn makes the tax scenario of 12 per cent on the overall cost of the house.
No Availability of Composition Scheme
Under the GST tax scheme, the composition scheme is not available for the work contractors as the nature of the business is serving as the composition is available for only goods supply. This will affect the small sub-contractors and will subsequently increase their cost of compliance.
The GST rules & regulations still demand some clarifications over the issues regarding input tax credit and composition scheme. Various rules and regulations which are rolled out for the work contractors are not feasible and may increase the cost of compliance. All the points must be safeguarded to create a healthy environment for this particular area of industry.
Sir,
My client contract with labor contractor for labor supply, for the machine, operate and goods loading & unloading, my client attract under GST act
If it falls under works contract service then only attract RCM otherwise not
Sir,
I am a building contractor. All projects value around Rs 50 lakhs.
At what RATE of GST should I charge for construction of:
1.Single residential house for my client on HIS PROPERTY.
I shall be supplying BOTH material and labour, the land is not mine
2. School building for my client on HIS PROPERTY.
I shall be supplying the material and labour, the land is not mine
Please let me know the rate and the MOST IMPORTANTLY the relevant section
NUMBER and notification of the GST act mention the rate
Thank you
1. TDS amount of 2% Deducted by Govt.office . can we avail an ITC on it.
2. Cement steel etc Can we avail ITC on it.
3. What to do if material bought from an unregistered person.
4. which one is applicable for taxable value. The net amount or gross amount.( Amount credited into our account or amount that release before any deduction like labour cess, 2%gst, Etc
1. As per Sec. 51(5), a deductee can claim credit, of the tax deducted and reflected in the return of the deductor in such manner as may be prescribed in his electronic cash ledger. Hence it is presumed that credit in the electronic cash ledger will flow automatically from certificate electronically made available in Form GSTR-7A.
2. No ITC is available for goods and services for construction of immovable property on his own account. ITC will not be available even if such goods/services are used in the course or furtherance of business,
3. since the seller is not registered under GST, therefore no GST is payable by you.
4. GST is levied on transaction value which is “the actual amount paid or payable for the goods”.
I have given Turnkey project to a contractor for the demolition of old house and reconstruction of my residential house ( stilt parking at GF and then four residential floors – for self-use of the family). As per GST rules, it will fall under Works Contract under services and will attract 18% GST which will be charged by the contractor to me. However, I want to know whether the contractor will be entitled to avail ITC on inputs ( used by him for construction e.g. construction material)?
Input credit will be available to the contractor for the construction material. read section 17(5) of the CGST Act.
Sir,
section 17(5) of CGST Act only talk about input services received for further supply of works contracts service. There is no clarity given about input tax credit for input goods purchased by the contractor. Also in Authors reply in given below comments, two answers are given. so please give some clarity in this issue.
Could you tell me if finishing/ completion services like painting, etc., are a part of a single works contract? Or are they separately taxed?
I HAVE RAISED A INVOICE TO ‘PWD’ IN WEST BENGAL. GST RATE WAS APPLICABLE @12%. NOW, THE DEPARTMENT SAYING THAT 2% OF TAX AMOUNT WILL BE SUBMITTED BY THEM ON OUR BEHALF AND REST OF THE TAX AMOUNT WILL BE PAID TO US. IS THIS RIGHT WAY. THEN HOW WOULD WE SHOW IT IN GSTR 3B AND GSTR 1 RETURN. PLEASE SEND ME SOME HELPFUL ANSWER TO MY ABOVE MAIL ID. THANK YOU
Sir as you are dealing with Govt. department, from October 2018 they are required to deduct TDS @2 % from the amount paid to you. You can claim the credit of the same after accepting such amount populated in your TDS credit received tab. Such credit can be claimed in GSTR-3B.
वर्क्स कॉन्ट्रॅक्ट मे eway bill कैसे बनाना है, सिर्फ सप्लाय मटेरियल का बिल बनने के बाद ऍप्लिकेशन बिल भी eway portal पर बनाना चाहिए क्या?
Only e-way bill of material supplied from one place to another need to be made.
1. Sir, I am govt contractor. We drilling the bore and supply and installation of the submersible pump and other items also for govt. Then what will be GST rate?
2. Sir, we are doing the operation and maintenance of water supply scheme of govt. What is GST on it?
3. we supply laying and joint the pipeline for govt what will be GST on this work
Please tell us GST rate on all three different project and how we can get the exemption on GST.
Thanks
The Central Government vide Notification No. 20/2017-Integrated Tax (Rate), date 22-08-2017, has amended the GST rate on Government contracts to 12 percent from 18 percent. This rate would be applicable for ongoing as well as new contracts
I WANT TO ASK ( ideal in the construction of roads bridges and dams):
1) Whether construction services comes under works contracts services ( If I use my own material or if I don’t use )
2) The rate of GST on it.
3) Availability of input tax credit.
4) What if I am providing the service to the main contractor who is providing service to govt as works contractor
Sir,
I work as work contractor supplying manpower service received bill from govt department has submitted GST 3B. Whether I have to submit GSTR 1, if yes then which point I have to fill?
If services provided (works contract) to the municipal corporation who will liable to pay GST. GST rate is 12 %. If the service provider has to pay GST then, how to calculate GST. Suppose my contract price is 100 shall I pay 12% on 100 or think that it will inclusive of 100. Because municipal is not paying us.
In this case GST is inclusive of 100.
Works contract completed on March of 2014. Final payment received in October 2017. The Invoice is not raised for final payment. GST applicable for final payment?
No tax shall be payable on a supply of goods made before appointed date where a part of the consideration is received after the appointed date but a full duty or tax payable has already been paid under the earlier law.
AB (Joint Venture) received WCS contract from the government. where A (Sub-Contractor) is providing WCS to JV and charging 12% GST as per new amendment. but B (Sub-contractor) is only providing service (not WCS) then what percentage of GST should be charged by B to JV? 12% or 18%. even if B charge 18% to JV, JV is only giving them 12% because they are going to raise an invoice to government @12% only. Therefore 6% cost will be borne by B. Can this be claimed as refund afterwards if paid @ 18% to the government?
The rate of GST depends upon the type of services provided by B to JV and as per new amendment, only WCS provided by the subcontractor to govt are covered under 12% slab.
Suppose I am filing GST of December Month and in that month I received the amount of previous year month Contract Work. Can I show that amount in filing GST of December Month?
In GST returns, data related to invoices issued in a concerned period have to be shown.
If I take a subcontract of a govt as well as private work from a contractor what GST I have to bare? if I transport my vehicles in sand murrum dhulai what liability for me
In case you take a subcontract from a contractor, who provides services to govt., then GST will be 12% / 5% ( as the case may be ).
Please explain 5% case
Sir, we are mfg. co. of (SAW) pipes & we are taking works contract of supplying & installation of pipelines i.e. for MIDC. Municipal Corp. HPCL BPCL IOCL. current tax rate is 18% for m.s. pipes. sometimes we are getting direct works contract through the company, or some time through the main contractor. in 25th GST Meeting for WCS reduced rates from 18% to 12 %.
We want to know, the reduced rate is it applicable to us? & is it applicable for service & supply in both cases? we are confused, please give us advice. For your more info copy pasted the detailed draft from GST meeting. as below———–
12.To reduce GST rate (from 18% to 12%) on the Works Contract Services (WCS) provided by sub-contractor to the main contractor providing WCS to Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity, which attract GST of 12%. Likewise, WCS attracting 5% GST, their sub-contractor would also be liable @ 5%.
If you are providing services to the main contractor, who in turns providing the services to govt., then GST will be levied @ 12% / 5% accordingly and these amended rates will be applicable from 25th Jan 2018.
Dear Sir,
In case of Government Contractor, is reverse charge applicable on them if they purchase materials & other things from Unregistered persons. Second, the GST amount would be charged on the total consideration or only on the service charges claimed by the Govt. Contractor.
Reverse charge on purchases from an unregistered dealer has been suspended till 31.03.2018. GST has to be charged on the total consideration charged.
We are providing O & M (Operation and Maintenance) service for rural water supply to District Board ( Government). Monthly bill value is INR 2.2 Crores. what is the GST % claimable. What is the GST applicable our subcontractors? The contract involves mainly manpower engagement.
Please clarify.
12%
For govt contractor, the GST is 12%
for private work, it is 18%.
If I take a subcontract of a govt work from a contractor what GST I have to bare?
please clarify.
18%
I have booked an under construction apartment in Mumbai in 2015 in project X BKC through M/s Radius developers. post-GST I told that I am not eligible for GST because the Ten BKC is a redevelopment project. MIG CHSL (Group-I) has granted development rights to MIG (Bandra) Realtors & Builders Pvt. Ltd. (MBRBPL). Under an Agreement Relating to Redevelopment, MBRBPL and Radius Estates & Developers Pvt. Ltd. are undertaking the construction and execution of the project as a joint venture, wherein Radius Group has taken the responsibility to undertake the construction at its costs and expenses. Since the construction cost is being incurred by Radius, the only Radius is entitled to ITC and MBRBPL does not have ITC and hence they are unable to pass any ITC benefit towards the units/flats retained by them in the Project. Since the unit booked by you i.e. W9-2602 comes from the share of Units held by MBRBPL, they are unable to pass on ITC benefit as they themselves have none.
In works contract service under GST , ITC will not be available on :
i.e. ITC will only available to sub-contractor and will not be available to main contractor, so he cannot pass any ITC benefit to consumer.
Sir,
I am a govt. works contractor having registered under GST act 2017, I have received a payment of Rs.1200000/ against the construction of govt. building in the month of October 2017. I have purchase building materials as cement, iron bars, bricks, etc. amounting Rs.750000/. Sir, it is my request you how to calculate GST and how much GST will payable by me with full illustration by taking abatement. when GSTR-3B will be filed and how do I fill up the GSTR-3B.
Read this blog https://blog.saginfotech.com/gst-impact-on-works-contract
Hi, I have booked a residential apartment in a new project in Bangalore – with a total agreement value of approximately 1.5 Crores. The booking even though happened just before GST kicked in, the agreement will be signed now. I have requested the builder to pass on the Input Tax credit to us, however the builder states as below:
“We are not directly purchasing any material from manufacturer hence as a developer we are not getting any immediate benefit of Imputed Excise duty. Tax Benefit if any will be with Sub Contractor. If subcontractor passes the same to us we can analyze the net impact and then we can decide how much we can transfer the same.
As a transitional provision in GST being a developers benefit of Credit of Excise Duty on closing WIP is not available.
As of today, we are not getting any benefit because of GST.”
Can you please help me in understanding how we can benefit from the input tax credit and we believe that it should get passed on to us. I believe that the sub-contractor should pass on the benefit to the builder and they should pass it on to us. Else the builder should at least pass on the benefit of Service tax paid to the sub-contractor – if they are not getting the benefit of input tax credit.
Under GST benefit of input tax credit is available to the entire chain of manufacturers, dealers, contractors etc. The input of excise duty not available earlier is now subsumed under GST and benefit is avabilable. In such a case, manufacturers should reduce their prices and pass on the benefit of same to sub-contractors and developers.
Prices shall only be reduced if the benefit is passed from sub-contractors. In such a scenario, developers should persuade contractors to pass on the benefit.
What is the GST code for works contract with 12 % tax is code 9954 or incomplete code when we search against code 9954 it shows 12 and 18 percent? Please advise complete HSN code for work contract for new works.
Dear Sir, Please tell the GST rate on Works contract services……
The original rate was 18%………has it been changed? Please mention the notification no.
Thanks,
Vipin
Please refer to this link. https://goo.gl/1pskGu
SIR, I AM INDIVIDUAL HOUSE (INCLUDING MATERIAL) HOW I COME TO GST AVAIL INPUT OR NOT. WHAT IS THE RATE OF TAX?
if you are in the business of house construction, then tax rate as applicable to works contract service is applicable in your case. Input credit will not be available on the house construction material purchased.
Dear Sir, work contract thro Mahada I work contract with material Cement river sand steel purchase bills my name and purchase material GST input credit milega ya nahi repair old building Mahada housing board work in Mumbai housing repair board in Mumbai.
Input tax credit for material, sand, steel, repair work of building etc. supplied by works contractor as part of works contract services for construction of immovable property i.e. houses in your case shall not be allowed Such input tax credit is restricted under section 17(5) of CGST Act 2017 immovable property i.e. houses in your case shall not be allowed. Such input tax credit is restricted under section 17(5) of CGST Act, 2017.
if any govt work contractor pay labour amount to their labour but they don’t have any GST bill of purchase of material they want to claim contract amount from govt then he is liable to file gst return …for claiming that amount or at what amount they have to file GST return. They have new GST registration….
Example;-
Labour amount paid: INR 40000
Contract amount: INR 70000
No such conditions have been specified as such for claiming amount.
We had submitted an invoice to the company for civil work on 1st Oct. After that the invoice stay in the company for verification. If that works will OK as per invoice then we have no problem for of GST deposit against the invoice. If the company engineer does deduction in invoice & after deduction, they told us in Nov month please make a revised invoice as per deduction. So in that case which GST tax we will have to be deposit in that was in Oct month or which will in make in Nov month. That is the main confusion. Please suggest.
Dear Sir, We have the co-operative society, we have 8 (eight) members in the society. We had got a land from HIDCCO on 2014 at Kolkata (W.B). We had decided and contract with one Developer on lump sum basis amount of 1.99 cr for made an 8 flat all 8 (eight) our members for self-residential. The said contract had been sing on December’2016 before GST. And we had paid to Developer before GST 40.00 Lacs. Project work is going, the developer will be hand over us on sept’2017.
My question is – Developer shall be raised bills as Works Contract right now from 1st July 2017 and tax should be how much rate?
02. Input Tax credit Developer availability or not (which section): i,e ( Input Tax like Brick, cement, TMT, Sand and others ).
SIR, MY PURCHASES ARE @28% AND UNDERWORKS CONTRACT I BILL @18% SO WHAT IS TO BE DONE WITH LEFTOVER ITC. HOW TO FILE GST RETURNS THEN.
Sir main janana chahata hu ka hum ko gst tax bill karwana ka baad deposit karwana hai k payment ana ka baad karwana hai
Actually, sir, we want to know when will we have to submit the GST tax. Then we submitted an invoice to the company or when we received payment from the company against that work we had completed. This is the more complicated question for us.
For work contractors, How can we deposit GST tax first. Whenever we did not get the payment from the beneficiary . When beneficiary will do the payment then we should able to deposit the GST tax.
Sir, We are government (PWD) C Class contractors, and we construct roads and bridges for government local authorities. Recently we have received a payment for one of the contracts executed by us, it was a long-running one year contract i.e. the contract was received by us in last year but payment was received by us in October 2017, we registered in GST from October, we were registered taxpayer in VAT also.
Kindly tell me how much GST, we should pay and whether credit for the material is available to us which was purchased when GST was not there i.e. it was including VAT, and what would be the treatment for labour services acquired by us to execute the contract.
Let us know about the penalty and interest provision if any applicable in our case.
Thanks, & Regards.
sir, I am registered in up and I got the agreement of solar plant installation in Delhi. I have to take another reg? and after 22 meeting it’s 12% or 5% and avail ITC or not? your effort is precious.
Dear sir, I am a working contractor of East Coast Railways at Bhubaneswar. I am doing mainly track maintenance work where Railways supplies materials and I am providing labourers for executing the works contract. So ITC is not possible here.Then what will be the GST? kindly advise me so that I will claim bills for the works executed after VAT.
if you are supplying only labour then it will not amount to works contract service. GST rate on labour supply services is 18%.
I manufacture aluminium windows at my factory and then install and assemble them at the client’s site. Does this constitute work contract? if yes. am I eligible to take ITC? also by what documents can I send my material on site.
According to the definition of works contract under GST, works contract will be a contract for performing some work, so if there is a proper contract between your client and you then this will consider as a works contract.
Sir why government contractor paid GST they do the work of govt./public interest like roads or bridge and govt. Building and also paid GST at time of purchase and GST is not included in rates of agreement of contractor. Why the department not revised item rate after GST or not add GST amount in contractor bill.
Please clarify your question.
I am doing works contract under Indian Institute of Technology (IIT) and raised tax invoice for the work adding 12% GST. Now is asking for input tax credit (ITC) for the materials I purchase. Now how do I pass on the ITC to them?
I have engaged a contractor for construction of my personal house.with material and labor.contractor is asking for GST extra on the every bill for payments while it was not told at the time of the agreement. How much ITC is available to the house owner.
As you are availing services for personal use and you are not registered under GST act, so you are not eligible for availing ITC of GST paid to the contractor.
How much GST must be paid in works contract of civil work to the contractor.Whether ITC is available to the contractor on individual materials of construction. Will it not be an extra burden on a customer because the contractor is including GST of individual materials in the offer rates for construction.
On works contract service, there is applicable 18% GST rate and a contractor can claim ITC on inward purchased material for construction.
Sir, We provide borewell water to Railways on the contract basis and we have registered in GST in HSN 2201. Will it be service or Goods?
What will be our GST rate? We don’t have their GSTIN/UIN, neither are they giving us as they say it doesn’t attract any GST.
We receive payments after a period of few months directly in our accounts. No receipt, no Invoice.
How should we file GST returns?
If the transfer of property in goods is involved in the execution of contract then it will be treated as a works contract and provisions of works contract apply.
Borewell water is moved from our bawry (well) to Railways place.
Sir, we are the work contractor in Himachal Pradesh for installation of solar fencing. We purchase the material against 5%,18%,28% under GST after installation the work we don’t know what is our tax slab.
Work contractors are treated as service provider in GST, so 18% rate is applicable.
sir, we are work contractors, in our company we engaged labour, machinery, dumpers, and material suppliers all these are un-registered dealers . So how much GST rate above them. Are WE LIABLE TO PAY GST?
Sir, what are the deductions allowed for Govt contractors (PWD NH etc) and whether labour payments also comes under RCM.
GST Applicable on Labour Charges 18% .GST Paid on Reverse charge Basis.
WHAT IS THE STATUS OF THE CONTRACTOR WHO PROVIDES SERVICE TO THE COMPANY SITUATED IN ANOTHER STATE, IS HE AGAIN REGISTER HIMSELF IN THAT PARTICULAR STATE FOR HIS WORK AND CHARGE CGST/SCGST IN BILL OR HE CAN BILL WITH IGST FROM HIS ORIGINAL LOCATION OF STATE.
Eg. My company is registered under GST in Maharashtra and we are service provider in multi states, our work location is different in many states. Some one is ask to register my company under GST in Tamilanadu and charge CGST/SCGST instead of IGST. Whereas we are charging them IGST 18%. Kindly suggest what is good to us.
If the company has place of business in different states and is providing services from that state, then registration is required to be obtained in all the states in which company has place of business.
We are work contractors. We are not filed VAT since three years, now what we can do sir?
If you are getting newly registered in GST then you have to file monthly returns under GST. If you were registered under VAT then you should have filed the return under VAT also and after migration under GST you have to file return under GST.
YOU DONE ANY BUSINESS PAST THREE YEARS
We are govt contractors class A in the state of Himachal Pradesh. kindly inform which section of GST is applicable on us we build roads and bridges .
WHAT IS THE STATUS OF THE SUB-CONTRACTOR WHO PROVIDES SERVICE TO THE MAIN CONTRACTOR, WHO IN TURN PROVIDES SERVICE TO THE GOVERNMENT ORGANISATIONS, WHICH IS NOW EXEMPT BY WAY OF NOTIFICATION NO. 20/2017-CENTRAL TAX (RATE) DATED 22.08.2017. PREVIOUSLY, SUB CONTRACTORS SERVICES WERE EXEMPT BY WAY OF SL.NO. 12 AND 29(H) OF NOTIFICATION NO. 25/2012 DATED 20.06.2012.
WHETHER EXEMPTION IS AVAILABLE FOR SUCH SUB-CONTRACTORS NOW ?
Suppose, a contractor submits a bill on work contract and the billed(work done) amount is Rs.1,00.000.00 . What amount will have to be deducted in West Bengal as TDS under GST by the deductor. Please let me know with calculation (CGST+SGST) by example so that I can learn the calculation.
Under GST tds can only be deducted by –
recommendations of the Council,
At the rate of 1% on taxable value.(i.e. excluding the amount of GST).
Govt. contractor will pay GST at the time of purchase materials( Bricks, Cement, Stone chips, Sand etc) and will pay GST on total works value. Double payment? Is it possible?
You can take ITC for the gst that you have paid at the time of purchase of raw material.
Why the govt. contractors will pay gst, Where after Tender the said govt. concern received the completed work with supply of materials from contractors ? Who is the customer of whom, between Govt. concern and contractor. who will charge the GST from whom? Govt. concern should pay the gst to the contractor separately or by the increasing the schedule rate. Am I right? But the Govt. concern is not paying the GST separately or increase the rate of items, and also some Govt. organised concern using the rate of 2007-08, 08-09-and 09-10 of PWD schedule. No current schedule rate are imposed by them.
Clarification is also needed in the case where contractors providing services to govt r not raising bill and getting payment on the basis of measurement book. In my opinion detailed entered in measurement should be the date of supply of service but the matter get confused because measurement book book has day to day entry of work done and supply therein.
Whether Electrical work related to building will be covered under the current definition of works contract in GST? it is because almost all the input electrical items are taxed under 28% and there is another definition of “composite supply” present to play a vital roll in this regard.
As noted, a works contract is one with a service element attached to the material being transferred in a sale. thus, if this condition is satisfied then it will be classified as works contract. whereas composite supply is one where 2 or more goods or services are supplied together, in a natural bundle and in a normal course of business, provided one of which is a principal supply. The composite supply is taxed at the rate applicable to the principal supply.
so will it be 18% or 28% GST for SITC of electrical works in residential and commercial projects ??
Whether works contract is applicable only in case of immovable property
Work contract may cover any type of work which is taken to be done on contract basis. It is not restricted to work contract for immovable property.
When Work contract is classified under Services, Can State Government deduct the GST @ rate of 1% or 2 % considering the work contract as supply of Goods involved in work contract ? Work contract is not under the Goods category.
Government can deduct TDS on the contract amount as per rate notified.
What about the works contract agreement with departments before GST and payments still pending ,,,what will be it’s tax rate
The goods/services supplied after the appointed day in pursuance of a works contract entered into before to the appointed day shall be liable to GST.
sir ,What about the works contract agreement with departments before GST and payments still pending ,,,what will be it’s tax rate
Sir
What about the works contract agreement with departments before GST and payments still pending ,,,what will be it’s tax rate
Same we are facing. 3 WCT conteacts havr come to a stansdstill
With due regard to the efforts put by author, I would like to contradict to some portion of this article, specially regarding to Input Tax Credit to builder. Kindly refer rate of GST announced by the GST council which specifically provides for full ITC but no refund of accumulated credit for CONSTRUCTION SERVICES. If, stand is taken that no credit shall be available to builder then, it shall contradict to the ITC rule for construction service. Hence, this interpretation should be reviewed.
Kindly contradict, if my interpretation appears to be incorrect.
This is the decision of GST council and has been under investigation by the government. Further information will be updated as soon as the information regarding this particular topic surfaces in media.