Though the Government is claiming that GST is going to benefit the business and industry but on deep analysis of existing negative/ mega exempt services and proposed exempt services (as announced by GST Council), it is revealed that construction/ infrastructure sector is going to be negatively affected under the new dispensation.
Here is list of some of the services, which enjoy exempt status as on date, would be taxable in the new regime as they do not find place in the exemption list released by GST Council :
| S. NO. | PRESENTLY EXEMPT AS NEGATIVE OR THRU MEGA EXEMPTION | STATUS IN THE PROPOSED GST REGIME |
| 1 | Services provided 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; |
Taxable as works contract @ 18% with Full ITC |
| 2 | Services provided 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 building owned by an entity registered under section 12 AA of the Income Tax Act, 1961 (43 of 1961) and meant predominantly for religious use by general public; (d) a pollution control or effluent treatment plant, except located as a part of a factory; or a structure meant for funeral, burial or cremation of deceased; |
Taxable as works contract @ 18% with Full ITC |
| 3 | Services 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) low- cost houses up to a carpet area of 60 square meters 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; (with effect from 1st March, 2016) (ca) low cost houses up to a carpet area of 60 square meters per house in a housing project approved by the competent authority under: (i) the “Affordable Housing in Partnership” component of the Housing for All (Urban) Mission Pradhan Mantri Awas Yojana; (ii) any housing scheme of a State Government. (d) post- harvest storage infrastructure for agricultural produce including a cold storage for such purposes; or (e) mechanized food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages) a. Taxable as works contract @ 18% with Full ITC |
b) Only pure labor contract would be exempt for a single residential unit and in the case of the “Affordable Housing in Partnership” component of the Housing for All (Urban) Mission Pradhan Mantri Awas Yojana;
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| 4 | Services provided to Government, a local authority or a governmental authority by way of –
(a) water supply, public health, sanitation conservancy, solid waste management or slum improvement and up-gradation; or; (b) repair or maintenance of a vessel |
Taxable @ 18% with Full ITC |
(The author is a Jaipur based practicing Chartered Accountant and can be reached on 09829063908, [email protected])
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