GST applicable for the work

CGST 236 views 2 replies

GANESH BHAT

4 Points Posted on 22 August 2020

My father was honoured with government work of drilling borewells to farmers identified by state government and provide submersible pump sets along with pump house in the year 2018.

In the estimate of the work as well as in the final bill of the work there is no mentioning of gst which has to be paid and entire estimated work is the actual cost of work.

ex - If the estimated cost is 1 crore, for entire 1 crore the expenditures were provided in the estimate.

Starting from 2019, government started giving separate line entry as gst to be paid in the actual estimate and bill.

In this scenario, where the entire cost of estimate were actual expenditure of the work, why and how the gst has to be paid ?

My say is if gst has to be paid for government work done, then there has to be separate line entry in the estimate for the gst amont and actual estimate of the work should include that amount as extra above the actual expenditure of the work.

Kindly let me know

Replies (2)

Pankaj Rawat

GST Practitioner

55067 Points Posted on 23 August 2020

Dear Ganesh Bhat

As per Notification 2/2018 CT (r) .

Composite supply of goods and services in which the value of supply of goods constitutes not more than 25 per cent. of the value of the said composite supply provided to the Central Government, State Govt or UT local authority or a Government
Entity by way of any activity in relation to any function entrusted to a Panchayat under article 243 G of the Constitution or in relation to any
function entrusted to a Municipality under article 243W of the Constitution is EXEMPTED.

But as I think this service is cover under the work contract services define u/s 2(119) , though it's work contract it's taxable.

Now that's sure that it's Taxable Supply as consideration is received by supplier of Services provider & as per Section 9 of CGST Act the GST is leviable.

Such supply which is to be provided continuously or on recurrent basis under contract , for a period exceeding 3 months are cover under the Defination of continue supply of Services Define u/s 2(33) & as per Section 31(5) the invoice shall be issued (Get need to be discharge) on or before due date of payment, before or any time when supplier receives payment, on or before date of completion of work.
And in case of Services the GST need to be discharge on advance payment received.

So the question of estimate & actual expenditure (Actual cost) do not arise