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GST Rate in Govt Works Contract

08 September 2019

Dear,
we are the contractor (work contact) of Govt. Organization and billed @ 12%.
Now we also sublet the project to different contractors job wise i.e Civil Work, UPVC work, Electrical work ( all the work is with material) .
Now questions is in which GST rate we can take Tax Invoice from Contractors.

pl. clarify and send any Notification regarding .

thanks

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11 Replies

Pankaj Rawat (GST Practitioner) (55047 Points)
Replied 08 September 2019

Rate is same for Sub-contractors as of Main Contractor .

If rate of Main contractor is 12 % then the rate of sub contractor will also be the 12%

Kindly .Refer Notification 1/2018 CT .(R)

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sabyasachi mukherjee (26843 Points)
Replied 08 September 2019

Pankaj
the general rate of GST ON works contract service is 18% vide notification No. 11/2017-CT and no.8 dated 28.06.2017.
However in view works contract is a composite supply and rate cannot be 18% in all cases.

Pankaj Rawat (GST Practitioner) (55047 Points)
Replied 08 September 2019

Sabyasachi Mukherjee

Yes you are correct , but work contract to Govt dept , the rate is 12% & the same being ask by querist. But the main query is what will be rate for Sub-contractors .... & same being replied by me , if it's 18% then same 18% is also applicable to Sub-contractor.

Kindly refer above said Notification

sabyasachi mukherjee (26843 Points)
Replied 08 September 2019

@ pankaj
under which heading the query has taken registration.
let him answer first.
pankaj pls do not jump into conclusions.

Pankaj Rawat (GST Practitioner) (55047 Points)
Replied 08 September 2019

@ Sabhyachi

As far as I Understood ,. the query being asked that the main contractor has sublet the contract .
So it falls under the definition of work contract only.

& let the querist decide from reply given .

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sabyasachi mukherjee (26843 Points)
Replied 09 September 2019

@ panka
the nature of work is important.

1 Like

Pankaj Rawat (GST Practitioner) (55047 Points)
Replied 09 September 2019

@ sabyasachi
must refer the heading from querist

Siba Sankar Pahari (23 Points)
Replied 09 September 2019

@ Panjaj & Sabyasachi

the nature of the work is Composit Work under works contract , such as HVAC, UPVC, Fire Fighting etc. all the above work are sublet to subcontractors as SITC basis i.e there is involved of Materials and Labor too.

sabyasachi mukherjee (26843 Points)
Replied 09 September 2019

the query should not be ambiguous.
there are different rates:
1. 12% , 18% and 5%.
different rates are applicable .
for civil work its 12% and 18%..
concessional rate 12% is there.

Pankaj Rawat (GST Practitioner) (55047 Points)
Replied 10 September 2019

@ Siba

The main contractor has got the contract from Govt , & it's of work contract or you can refer Tender/Agreement , you can find the Rate of GST therein .

Now if the contract is sublet to Sub-contractor , the rate of GST charge by subcontractors to Main contractor will be the same which the Main contractor will charge to Govt in his bill.

Note : The nature of supply you have described is of work contract but still if any doubt then refer the tender letter.

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Suresh Agrawal (Tax Consultant) (40 Points)
Replied 10 September 2019

The GST rate for a works contract comes under service as per the GST Act. Or the GST rate for services is 18%. The GST rate on a work contract depends on the nature of services that will be provided. Contracts are taxed at the rate of 12% and 18% under most services.