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This query is : Resolved
21 May 2017
Is there any rate fixed of wct with government contracts in GST as I'm a govt contractor
22 May 2017
Its also 18%
24 May 2017
I asked about sales tax deducted on source in GST
03 August 2025
Got it — you’re asking about WCT (Works Contract Tax) or tax deducted at source on government contracts under GST.
Here’s the scoop:
Under GST, Works Contract Tax (WCT) as a separate tax has been subsumed. So, there is no separate WCT anymore.
Instead, GST applies on works contracts, usually at 18% (composite rate for works contract services) — but this depends on the state and type of contract.
Regarding TDS (Tax Deducted at Source) on government contracts:
Under GST, government authorities deduct GST TDS at 2% on the payment made to contractors (Section 51 of CGST Act).
This is not WCT but a GST TDS mechanism.
For sales tax deducted at source (TDS) under old VAT or sales tax regimes, that system was replaced by GST after July 2017.
Summary:
No WCT under GST.
GST charged @ 18% (or applicable rate) on works contract.
Government deducts 2% GST TDS on payments to contractors.
Here’s the scoop:
Under GST, Works Contract Tax (WCT) as a separate tax has been subsumed. So, there is no separate WCT anymore.
Instead, GST applies on works contracts, usually at 18% (composite rate for works contract services) — but this depends on the state and type of contract.
Regarding TDS (Tax Deducted at Source) on government contracts:
Under GST, government authorities deduct GST TDS at 2% on the payment made to contractors (Section 51 of CGST Act).
This is not WCT but a GST TDS mechanism.
For sales tax deducted at source (TDS) under old VAT or sales tax regimes, that system was replaced by GST after July 2017.
Summary:
No WCT under GST.
GST charged @ 18% (or applicable rate) on works contract.
Government deducts 2% GST TDS on payments to contractors.
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