Article explains What is works contract,? Works contract – Goods or services?, Block ITC on Procurement Of Works Contract services?, Maintenance of accounts by registered person executing works contract and GST Rates for Works Contract.
1. What is works contract?
As per section 2(119) of CGST Act “works contract” means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract;
Note: -Contract for any movable property: – Treated as composite supply/mixed supply
2. Works contract – Goods or services?
As per schedule II of CGST Act, works contract as defined above shall be treated as supply of services
3. Block ITC on Procurement Of Works Contract services?
Procurement of works contract services for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service;
Explanation.– the expression “construction” includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalization, to the said immovable property;
Example:-
- ITC on works contract services (Input Tax credit) will be available to builder because procurement of services for further supply of services
- However procurement of works contract services for construction of building for running as Hotel, then in that case procurement of works contract services is not for further supply of works contract services
4. Maintenance of accounts by registered person executing works contract
Every registered person executing works contract shall keep separate accounts for works contract showing –
(a) the names and addresses of the persons on whose behalf the works contract is executed;
(b) description, value and quantity (wherever applicable) of goods or services received for the execution of works contract;
(c) description, value and quantity (wherever applicable) of goods or services utilized in the execution of works contract;
(d) the details of payment received in respect of each works contract; and
(e) the names and addresses of suppliers from whom he received goods or services.
5. GST Rates for Works Contract
Chapter 99, Section 5 Heading 9954 (Construction services)
Till 30th Sept. 2017, 3 notifications issued for works contract under central tax rate i.e.
| Title | Notification No. | Date |
| CBEC reduces CGST rate on specified supplies of Works Contract Services | Notification No. 24/2017-Central Tax (Rate) | 21/09/2017 |
| CGST- Reduction in rate on specified supplies of Works Contract Services etc | Notification No. 20/2017-Central Tax (Rate) | 22/08/2017 |
| Rates for supply of services under CGST Act, 2017 | Notification No. 11/2017-Central Tax (Rate) | 28/06/2017 |
–
| Description of Service | Rate (per cent.)
CGST |
N/N & date | Comments |
| (i) Construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier.
(Note 1 shall apply for valuation of this service) |
9% | N/N 11/2017 dated 28th June 2017 | Description of services same as prescribed in Schedule II, Entry 5(b) |
| (ii) composite supply of works contract as defined in clause 119 of section 2 of Central Goods and Services Tax Act, 2017
(As written above) |
9% | N/N 11/2017 dated 28th June 2017 | Provision talks about works contract services as defined in section 2(119) of CGST Act 2017 |
| (iii) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied to the Government, a local authority or a Governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of, –
(a) a historical monument, archaeological site or remains of national importance, archaeological excavation, or antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958); (b) canal, dam or other irrigation works; (c) pipeline, conduit or plant for (i) water supply (ii)water treatment, or (iii)sewerage treatment or disposal. |
6% | N/N 20/2017 dated 22nd August 2017 | Ø Supplied only to specific person i.e.
• The government • Local Authority • Government authority Ø only by way of specific services Ø Following work not covered here which was covered by works contract definition • Fabrication, improvement & modification Note:- As per section 2(53) “Government” means the Central Government; and hence State Government not covered here |
| (iv) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of,-
(a) a road, bridge, tunnel, or terminal for road transportation for use by general public; (b) a civil structure or any other original works pertaining to a scheme under Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaas Yojana; (c) a civil structure or any other original works pertaining to the “In-situ rehabilitation of existing slum dwellers using land as a resource through private participation” under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana, only for existing slum dwellers; (d) a civil structure or any other original works pertaining to the “Beneficiary led individual house construction / enhancement” under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana; (e) a pollution control or effluent treatment plant, except located as a part of a factory; or (f) a structure meant for funeral, burial or cremation of deceased. |
6% | N/N 20/2017 dated 22nd August 2017 | Supplied to anyone and by way of specific services
Following work not covered here which was covered by works contract definition • Fabrication, improvement & modification |
| (v) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied by way of construction, erection, commissioning, or installation of original works pertaining to,-
(a) railways, excluding monorail and metro; (b) a single residential unit otherwise than as a part of a residential complex; (c) & (d) low-cost houses up to a carpet area of 60 square metres per house in a housing project approved by competent authority empowered under • the ‘Scheme of Affordable Housing in Partnership’ framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India; • the “Affordable Housing in Partnership” component of the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana; • any housing scheme of a State Government; (e) post-harvest storage infrastructure for agricultural produce including a cold storage for such purposes; or (f) mechanised food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages. |
6% | N/N 20/2017 dated 22nd August 2017 | Supplied to anyone and by way of specific services
Following work not covered here which was covered by works contract definition fabrication, completion, fitting out, improvement, modification, repair, maintenance, renovation & alteration |
| (vi) Services provided to the Central Government, State Government, Union Territory, a local authority (Note 3) or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of –
(a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; (b) a structure meant predominantly for use as (i) an educational, (ii)a clinical, or (iii)an art or cultural establishment; or (c) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in paragraph 3 of the Schedule III of the Central Goods and Services Tax Act, 2017. (See Note 2) |
6% | N/N 24/2017 dated 21st Sept. 2017 | • Supplied to only
Central Government, State Government, Union Territory, a local authority or a governmental authority • and by way of specific services • Following work not covered here which was covered by works contract definition Fabrication, improvement & modification Note that here specifically state government covered |
| (vii) Construction services other than (i), (ii), (iii), (iv), (v) and (vi) above. | 9% | N/N 24/2017 dated 21st Sept. 2017 |
Note: – 1
In case of supply of service specified in at item (i) of the Table above, involving transfer of property in land or undivided share of land, as the case may be, the value of supply of service and goods portion in such supply shall be equivalent to the total amount charged for such supply less the value of land or undivided share of land, as the case may be, and the value of land or undivided share of land, as the case may be, in such supply shall be deemed to be one third of the total amount charged for such supply.
Explanation .– For the purposes of paragraph 2, “total amount” means the sum total of,-
(a) consideration charged for aforesaid service; and
(b) amount charged for transfer of land or undivided share of land, as the case may be.
Note: – 2
Following persons specified in paragraph 3 of the Schedule III of the Central Goods and Services Tax Act, 2017.
(a) the functions performed by the Members of Parliament, Members of State Legislature, Members of Panchayats, Members of Municipalities and Members of other local authorities;
(b) the duties performed by any person who holds any post in pursuance of the provisions of the Constitution in that capacity; or
(c) the duties performed by any person as a Chairperson or a Member or a Director in a body established by the Central Government or a State Government or local authority and who is not deemed as an employee before the commencement of this clause.
Note-3 “local authority” means––
(a) a “Panchayat” as defined in clause (d) of article 243 of the Constitution;
(b) a “Municipality” as defined in clause (e) of article 243P of the Constitution;
(c) a Municipal Committee, a Zilla Parishad, a District Board, and any other authority legally entitled to, or entrusted by the Central Government or any State Government with the control or management of a municipal or local fund;
(d) a Cantonment Board as defined in section 3 of the Cantonments Act, 2006;
(e) a Regional Council or a District Council constituted under the Sixth Schedule to the Constitution;
(f) a Development Board constituted under article 371 of the Constitution; or (g) a Regional Council constituted under article 371A of the Constitution;
Author Bio
We are interior decorators and we make things both moveable and immovable
Fixed thins like glass partition
Sheds
Wall paneling
Wall paint
False ceiling
Plumbing and sanitary lines and fittings
False ceiling
Brick walls
Cement plastering
Laying marble tiles and granite etc
Laying electrical lines, and fixing switches etc
Fixing air conditioners, fridge, etc
Would be grateful to know as to how much GST I need to charge for such work contracts.
Taxes paid for different items are different like AC, CEMENT. GLASS WOOD PLY WOOD AND TAPESTRY ETC
They vary from 5% to 28%
will I be eligible for input benefit
I would appreciate a prompt reply
Regards
Sir,
I am registered works contractor under GST, supplied goods to private construction company.For that I have purchased goods from out of State with 12% IGST and supplied the same to the above company
In this regard ,the above company requested me to pay the tax amounts.
What is the procedure to pay gst tax amounts ,kindly give me feed back Sir.
with Regards
Sd/-C.Murali Kanth
[email protected]
Sir,
I am registered works contractor under GST, supplied goods to private construction company.For that I have purchased goods from out of State with 12% IGST and supplied the same to the above company
In this regard ,the above company requested me to pay the tax amounts.
What is the procedure to pay gst tax amounts ,kindly give me feed back Sir.
with Regards
Sd/-C.Murali Kanth
Hi Sir,
In case of construction contracts, when gross revenue is calculated on the basis of % completion method and no books are maintained, Sales tax will be calculated on Gross receipts or Gross receipts minus Service tax?
i am doing contract for supply installation testing and commissioing of electrical cotract
rly is deduting 12 % from my bill while i am paying 18 5 on my purchase
my first question is that will itc on my purchase will be avilable against railway elctrical contracts and secod wether railwaysshould deduct gst @12 % from our bills
I am a govt contractor . I am confused about input credit for building and road works. Even c a also confused about this . Shall we have to pay gst without input on payment. If yes then why we will pay 40,% or 30% on some items. This is really confusing.please reply
sir please let me now that in cae of work contract on what amount gst will bw levied .
whether it is leveid on supply of goods seperately by their respective rates or it is charged on contract value
Is there any liability to awarder, to deduct tax at source, while making payment? (Section 51 speaks on liability of
(a) a department or establishment of the Central Government or State
Government; or
(b) local authority; or
(c) Governmental agencies; or
(d) such persons or category of persons as may be notified by the Government
on the recommendations of the Council,
is there any notification issued in line with (d)?
Is GST exemption on AMRUT Yojana applicable for builder/engineer engaged in work contract?
YES, EWAY BILL MANDATE.
A work contract in a govt building a rural road using only land filling thus involving only srevice is taxable under gst or not
I m work contractor which returns is compallsary filling in gst
I m work contractor which returns is compallsary filling in gst
GST applicability on Purely Government Electrical Contract. While raising RA Bill if contract is given inclusive of GST. Then while raising bills how to books RA Bill.
My client doing works contract service purchased material which are used for output supply .The seller invoice is issued 31st august 2017 but seller of material uploaded in gstr 1 september month when can we claim the input tax credit
thank you
regards
doni raju
sir,
Please clarify the following points given below :
1 .what is rate of GST – if contractor supplying labour for our Raod Projects without involvement of materiel supply.
2.Is it Turnover Rs.20 lakhs mandatory for labour contractor
3.What is the Work contract Tax under GST
Suppose I am filing GST of December Month and in that month I received the amount of previous year contract work. Can I show that Amount in GST filing of December Month??…
What is the GST rate on distribution and pesting job charging or labour
we are extracting minerals out of our own machinery from a government mines area on a contractual basis as such minerals are then provided to govt for further sales. At what rate GST will be applicable. plz Respond as soon as possible on the E-mail provided.
Respected dear all,
E-way bill required for transporting the goods from manufacturing unit(factory ) to construction area
(All condition is satisfied the value Rs.50k and more than 10km.
Plz reply as soon as possible
Thanks in advance
We are interior decorators and we make things both moveable and immovable
Fixed thins like glass partition
Sheds
Wall paneling
Wall paint
False ceiling
Plumbing and sanitary lines and fittings
False ceiling
Brick walls
Cement plastering
Laying marble tiles and granite etc
Laying electrical lines, and fixing switches etc
Fixing air conditioners, fridge, etc
Would be grateful to know as to how much GST I need to charge for such work contracts.
Taxes paid for different items are different like AC, CEMENT. GLASS WOOD PLY WOOD AND TAPESTRY ETC
They vary from 5% to 28%
will I be eligible for input benefit
I would appreciate a prompt reply
Regards
Prabha
work contract service
work contract .repair building maintenance works