Works contract bill treatment
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
28 May 2018
Please Guide me as to how should I treat this Works Contract bill given by Works Division in GST? Since GST is not specied on this bill, what amount will be GST that my client needs to pay. Also Advise me what will be the invoice number and invoice date.
28 May 2018
Why GST is not mentioned? whether service is exempted or whether the job worker is not registered?
03 August 2025
Got it! Here’s how you should treat a Works Contract bill under GST when GST is not specified on the bill:
1. GST Treatment on Works Contract Bill
Under GST, works contract is treated as supply of services.
GST is payable on the entire contract value (both material and labor).
The rate of GST on works contract services is generally 18% (9% CGST + 9% SGST) or 18% IGST if interstate.
2. If GST is NOT Specified on the Bill
If the contractor issues a bill without GST, it is still your client’s responsibility to pay GST under Reverse Charge Mechanism (RCM) if the supplier is unregistered or GST is not charged.
Your client should:
Calculate GST on the full value of the works contract bill.
Pay GST under RCM.
Generate an RCM invoice showing GST details.
3. Invoice Number and Date
The invoice number and date should be from the original bill issued by the contractor.
For RCM purposes, your client can issue a self-invoice (if applicable) mentioning that GST is paid under reverse charge.
Maintain the original invoice as reference.
4. Summary for your client
Situation Action
Bill with no GST specified Pay GST under RCM at applicable rate (18%)
GST amount to pay 18% of total bill amount
Invoice number & date Use contractor’s invoice number and date
Documentation Keep original bill and RCM payment proof
5. Additional Note
Ensure that the contractor is GST registered. If yes, they must raise a GST invoice.
If not registered or fails to raise GST invoice, RCM applies.
Your client should claim input tax credit (ITC) on GST paid under RCM if eligible.
1. GST Treatment on Works Contract Bill
Under GST, works contract is treated as supply of services.
GST is payable on the entire contract value (both material and labor).
The rate of GST on works contract services is generally 18% (9% CGST + 9% SGST) or 18% IGST if interstate.
2. If GST is NOT Specified on the Bill
If the contractor issues a bill without GST, it is still your client’s responsibility to pay GST under Reverse Charge Mechanism (RCM) if the supplier is unregistered or GST is not charged.
Your client should:
Calculate GST on the full value of the works contract bill.
Pay GST under RCM.
Generate an RCM invoice showing GST details.
3. Invoice Number and Date
The invoice number and date should be from the original bill issued by the contractor.
For RCM purposes, your client can issue a self-invoice (if applicable) mentioning that GST is paid under reverse charge.
Maintain the original invoice as reference.
4. Summary for your client
Situation Action
Bill with no GST specified Pay GST under RCM at applicable rate (18%)
GST amount to pay 18% of total bill amount
Invoice number & date Use contractor’s invoice number and date
Documentation Keep original bill and RCM payment proof
5. Additional Note
Ensure that the contractor is GST registered. If yes, they must raise a GST invoice.
If not registered or fails to raise GST invoice, RCM applies.
Your client should claim input tax credit (ITC) on GST paid under RCM if eligible.
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