GST for Individual House Construction (Including Materials)

ITC / Input 4510 views 4 replies

S Mohammed

Works Contractor

82 Points Joined February 2009

I’m a Civil Contractor and I agreed to undertake the construction of an individual house on a turnkey basis (Means both materials & labor) for Rs.1500/- per Sq.Ft and the total area to be constructed is about 2000 Sq.Ft. The plot is owned by the client himself and my job is only to construct a house for him in his own plot.

Now in this case what should be the GST % I need to invoice, my client.
Will I get Input Tax Credit (ITC) for all the materials (Steel, Cement, Paints, Floor Tiles, Sanitary, Plumbing & Electrical Materials Etc…) that I purchase to execute this contract?
If I get the Input Tax Credit (ITC) from the GST department, do I need to return back that amount to my client?
Is there any upper limit to claim the Input Tax Credit (ITC), For example, this work’s total value is only 30 Lakhs (i.e Rs.1500/- per Sq.Ft X Total Area of 2000 Sq.Ft), and what if I claim Input Tax Credit (ITC) of about 24 Lakhs (i.e, about 80% of the invoice value). Is this acceptable by the GST department?

Replies (4)

Anshuman Basu

account -GST

1556 Points Joined June 2018

1st tell me your rate for rs 1500/- is inclusive GST or not
1Rate is 18%
2,) you get ITC

CMA Poornima Madhava

CMA

13117 Points Joined May 2009

1) GST @ 18%

2) Yes, provided you have tax invoices

3) No

4) ITC can be claimed to the extent of input purchases having tax invoices.

sukhwani keyur

588 Points Joined July 2019

1) It is works contract service so GST @ 18% shall be charged.
2) Yes. You will get ITC for all materials that you purchased to execute this contract.
3) ITC is not returned to client. ITC is always deducted from your total output tax liability and net liability is paid in cash to the government.
4) There is no such upper limit or lower limit for ITC. You can claim ITC only to the extent of your inward supply. The condition is that you should possess proper tax invoice and invoice should be properly reflected in GSTR 2A.

APURBA CHATTERJEE

QUALIFIED CHARTERED ACCOUNTANT

608 Points Joined November 2016

Yes, your case will fall under work contract service, Rate of GST 18%. ITC is eligible as per valid invoices. There is no upper limit but some blocked ITC is there as per section 17(5) of the CGST Act, which can not be availed.