Is gst applicable in this situation ?

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This query is : Resolved

Vision GT2017

Vision GT2017 (Querist)

05 August 2018 Dear Sir,
I represent an unfortunate group of housing society association where the builder of an high-rise apartment abandoned the project midway and the association (registered under societies act of Tamilnadu) fought a long battle of arbitration to win the rights to complete the construction. Now, with available balance of funding (clearly insufficient) , we are working towards hiring a civil contractor to complete the pending works (to the tune of 25 crores - all put together - materials and labour).

1) Is pure works contract (without material supplies) exempted from GST in this case ? The current quotation from contractor includes supply of materials and if we pay GST @ 18% - it will cause huge burden to us..

2) Procurement of materials anyway attract GST - which we are ready , if the benefit is there..

Please suggest..

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

05 August 2018 1 Not exempt from GST. ITC has to be claimed and pass it on to you by the contractor on material purchase.

Vision GT2017

Vision GT2017 (Querist)

06 August 2018 Thanks for your reply sir. Specifically, would like to know if some or all members of our association qualify under this (first home for many of them)..

Heading - 9954 - " Services provided by way of pure labour contracts of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of acivil structure or any other original works pertaining to the beneficiary-led individual house construction or enhancement under the Housing for All(Urban) Mission or Pradhan MantriAwasYojana"

Heading 9954 - "Services by way of pure labour contracts of construction, erection, commissioning, or installation of original works pertaining to a single residential unit otherwise than as a part of a residential complex."

Since association will only act as facilitator to pool the money from members, they are building and completing themselves.

Please let me know your thoughts on this.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

06 August 2018 The above exemption is available to individual house construction not for apartment.

Vision GT2017

Vision GT2017 (Querist)

06 August 2018 Thankyou for the clarification.

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