GST BUSINESS

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Borewell drilling services are generally not eligible for the GST Composition Scheme as they are classified as works contracts. However, if your business provides works contracts to unregistered persons or end consumers and your annual turnover is up to ₹50 lakhs, you may be eligible. In such cases, GST is charged at a concessional rate of 6% (3% CGST + 3% SGST) on your taxable turnover, but you cannot claim Input Tax Credit.

Suresh S. Tejwani

Suresh S. Tejwani (Querist)

16 December 2024 BOREWELL SERVICE IS APPLICABLE FOR GST COMPOSITION SCHEME ????

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

16 December 2024 No, borewell drilling services are not applicable for the GST Composition Scheme due to their classification as works contracts and the complexities involved in distinguishing between supply of goods and services in this context. Borewell drilling involves elements of both goods and services, classified as a works contract under GST law.

Suresh S. Tejwani

Suresh S. Tejwani (Querist)

16 December 2024 AS PER 2ND OPINION BORE WELL SERVICE IS IN NATURE OF WORKS CONTRACT
WORKS CONTRACT IS INCLUDED IN SUPPLY OF SERVICE
CAN WE OPT COMPOSITION SCHME 3%+3% ?

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

16 December 2024 For works contract, the scheme applies under the following conditions:
Contractors with an annual turnover of up to ₹50 lakhs can opt for the composition scheme.
GST is charged at a concessional rate of 6% (3% CGST + 3% SGST) on taxable turnover.
Businesses opting for the scheme cannot claim Input Tax Credit (ITC).
It is applicable only for services provided to unregistered persons or end consumers, not for inter-state or government contracts.

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