GST on contract given by Railways

I am an accountant and one of my client is a contractor who has got work contract from railways for construction of a building. However the works contract has applied gst @ 12% and the procurement of material for construction activity has gst btw 18 to 28%. how to bridge the gap and can he get ITC.
Replies (7)
Quick Summary
This discussion addresses a contractor's concern about the Goods and Services Tax (GST) on a building construction contract with the railways. The client is paying GST at 12% on the contract, but incurring GST between 18% and 28% on material procurement. The advice provided confirms that the contractor can claim Input Tax Credit (ITC) to offset this difference, effectively managing the GST burden through value addition.

Yes he can claim itc.
Thanks

The value addition by ur client would get the gap closed

Say ur client buys 100 rs. Of goods with gst of 18% and pay gst on 150 @ 12% therefore ur client pays 0 tax from his pocket

Further ur clients collects 18 rs of tax too from his client. So nothing would b paid from his pocket in real sense. 

Say ur client buys 100 rs. Of goods with gst of 18% and pay gst on 150 @ 12% therefore ur client pays 0 tax from his pocket

Thanks a lot

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