GST On Centage Income
This query is : Open
22 May 2025
ABC Limited is a government company with 100 percent shares owned by State Government. They provide supervison services for Construction of Roads, Bridges. For this they receive a certain percentage of the Civil Works as CENTAGE.
So basically what happens, A Contractor XYZ Ltd for the construction services raises a Tax Invoice in the name of ABC Ltd. Suppose for Rs 100 they raised a Tax Invoice and charged 18 percent GST on it and the total Invoice Values becomes 118. Now considering Rs 100 as the civil works value ABC Ltd books a centage Income of 8 Rupees in their books. This will be paid by the concerned road construction department. Now does ABC Ltd requires to pay GST on this 8 rupees i.e. Centage Income. If no, why? If yes, then can ITC of Rs 18 be claimed?
So basically what happens, A Contractor XYZ Ltd for the construction services raises a Tax Invoice in the name of ABC Ltd. Suppose for Rs 100 they raised a Tax Invoice and charged 18 percent GST on it and the total Invoice Values becomes 118. Now considering Rs 100 as the civil works value ABC Ltd books a centage Income of 8 Rupees in their books. This will be paid by the concerned road construction department. Now does ABC Ltd requires to pay GST on this 8 rupees i.e. Centage Income. If no, why? If yes, then can ITC of Rs 18 be claimed?
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