GST rate on Works Contract Services with effect from 18th July, 2022 along with Changed Provisions pertaining to RCM on GTA and Provisions relating to RCM on residential dwelling units
WORK CONTRACT SERVICES w.e.f. 18.07.2022 vide notification no. 03/2022-Central Tax (rate) dated 13.07.2022.
| Sl. No. | Chapter, Section or Heading | Description of Services | Old Rate (per-cent) | New Rate (%) -W.e.f 01.01.2022 [Employer -Project Authority]-Central Govt, State Govt, Union Territory and Local Authority
|
New Rate (%) w.e.f 01.01.2022 [Employer -project Autho rity]- Gov-ernment Entity, Govt Authority & Others | New rate (Percent) w.e.f 18.07.2022 [Employer-Project Authority] Central Govt, State Govt, Union Territory, Local Authority, Govt Entity, Govt Authority & Others and sub-contractor thereof |
| Up-to 17.07.2022 | W.e.f 18th JULY 2022 | |||||
| 3 | Heading 9954 (Construction Services) | “(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. |
12% | 12% | 18% | 18% |
| 3 | Heading 9954 (Construction Services) | (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; (c) ‘(c) a civil structure or any other original works pertaining to the “ln-situ redevelopment of existing slums using land as a resource, under the Housing for All (Urban) Mission/ Pradhan Mantri Awas Yojana (Urban);-N.No.1/2018 dated 25.01.2018 (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 ‘(da) a civil structure or any other original works pertaining to the “Economically Weaker Section (EWS) houses” constructed under the Affordable Housing in partnership by State or Union territory or local authority or urban development authority under the Housing for All (Urban) Mission/ Pradhan Mantri Awas Yojana (Urban); N.No. 1/2018 dated 25.01.2018 (db) a civil structure or any other original works pertaining to the “houses constructed or acquired under the Credit Linked Subsidy Scheme for Economically Weaker Section (EWS)/ Lower Income Group (LIG)/ Middle Income Group-1 (MlG-1)/ Middle Income Group-2 (MlG-2)” under the Housing for All (Urban) Mission/ Pradhan Mantri Awas Yojana (Urban); N.No. 1/2018 dated 25.01.2018 (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. a building owned by an entity registered under section 12AA of the Income Tax Act, 1961 (43 of 1961), which is used for carrying out the activities of providing, centralised cooking or distribution, for mid-day meals under the mid-day meal scheme sponsored by the Central Government, State Government, Union territory or local authorities. N.No. 1/2018 dated 25.01.2018 |
12% | 12% | 18% | |
| 3 | Heading 9954 (Construction Services)
|
(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 including (N/No. 1/2018 dated 25.01.2018 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 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; (d) low cost houses up to a carpet area of 60 square metres per house in a housing project approved “(da) low-cost houses up to a carpet area of 60 square metres per house in an affordable housing project which has been given infrastructure status vide notification of Government of India, in Ministry of Finance, Department of Economic Affairs vide F. No. 13/6/2009-INF, dated the 30th March,2017; N. No. 1/2018 dated 25.01.2018 (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. |
12% | 12% | 12% | 18% |
| 3 | Heading 9954 Construction Services | “(vi) Services provided to the Central Government, State Government, Union Territory, 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 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. |
12% | 12% | 18% | 18% |
| 3 | Heading 9954 (Construction Services) | “(vii) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, involving predominantly earth work (that is, constituting more than 75per cent. of the value of the works contract) provided to the Central Government, State Government, Union territory, local authority, a Governmental Authority or a Government Entity. | 5% | 5% | 18% | 12%12 |
| 3 | Heading 9954 (Construction Services) | (Viii) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017 and associated services, in respect of offshore works contract relating to oil and gas exploration and production (E&P) in the offshore area beyond 12 nautical miles from the nearest point of the appropriate base line. | 12% | 12% | 12% | 12% |
| 3 | Heading 9954 (Construction Services) | “(ix) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017 provided by a sub-contractor to the main contractor providing services specified in item (iii) or item (vi) above to the Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity. | 12% | 12% | 18% | 18% |
| 3 | Heading 9954 (Constr-uction Services) | (X) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017 provided by a sub-contractor to the main contractor providing services specified in item (vii) above to the Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity. | 5% | 5% | 18% | 12% |
Vide notification no. 05/2022- Central Tax (rate) dated 13.07.2022, the following has been inserted:-
“after serial number 5A and the entries relating thereto, the following serial number and entries shall be inserted , namely:
| S. No.
(1) |
Category of Supply of Services (2) | Supplier of Services (3) | Recipient of Service (4) |
| “5AA
|
Service by way of renting of residential dwelling to a registered person | Any Person | Any registered Person |
IMPACT OF CHANGE:-By insertion of the above category under the list of services on which RCM is applicable under Section 9(3), the registered person (i.e. Corporates, Partnership Firms, LLP, Society, AOP,Individual who are registered under GST), has to pay GST under RCM@18% if such registered person is availing rental services of a residential unit, including “residential unit taken on company lease of its employees” or “ any residential dwelling being used as an office space” by the entity .
Being used for any
Input Tax Credit (ITC) on the amount paid under RCM will be available to the registered person after payment of RCM liability.
It may also be noted that over here , that the RCM will only be payable in case the renting of the residential dwelling has been done by the registered person directly.
USE: whether for residence or office or store or any use.
1) GST payable on RCM for services taken from Goods Transport Agency (GTA).
Currently, in case a company (Body Corporate) or a Partnership firm or a Society or a casual taxable person or others avail services from a GTA who has not paid GST@12%, then GST under RCM is payable by the said registered entity @5% or 12%, as the case may be.
NOW VIDE NOTIFICATION NO.05/2022-Central (Rate) dated 13.07.2022, this positions has now been amended as under:
(i) The words “ who has not paid central Tax @6% has been omitted.
(ii) The following proviso has been inserted:-
“Provided further that nothing contained in this entry shall apply where,
(i) The supplier has taken registration under the CGST Act,2017 and exercised the option to pay tax on the services of GTA in relation to transport of Goods supplied by him under forward charge; and
(ii) The supplier has issued a tax invoice to the recipient charging central Tax at the applicable rates and has made a declaration as prescribed in ANNEXURE III on such invoice issued by him “.
ANNEXURE-III
IMPACT OF CHANGE: Thus, now in case a Goods Transport Agency, submits a Tax Invoice and has also submitted a declaration in the beginning of the financial year stating that the GTA has exercised the option to pay tax under forward charge for the year, NO GST UNDER RCM is payable by the recipient of Services.
Format of ANNEXURE III:
Declaration
I/We have taken registration under CGST Act, 2017 and have exercised the option to pay tax on services of GTA in relation to transport of goods supplied by us during the Financial Year ________under forward charge.
Author Bio
