Gst tds and ITC claim w.r.t. subcontractor and govt. contractor

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Mr. Mishra

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95 Points Posted on 10 August 2021

I work for the government as a government-contractor - railway bridge & platform repair construction works (HSN 9954) and raise invoice for 12% and railway deducts gst-tds as well as ITR-TDS

1st question :-

if my subcontractor is GST-Registered,
what will be the gst percentage applicable in the invoice he raise (to me) as my sub-contractor - 18% or 12% ? (HSN 9954)

2nd question :-

i know that 1% ITR-TDS will be deducted (u/s 194C) [kindly let me know if iam wrong]
now;
does GST-TDS also applies ? if yes what percentage ?

3rd question :-

can i take ITC of the gst amount mentioned in the invoice raised by my subcontractor ?

Replies (2)

Quick Summary

This discussion clarifies GST TDS and ITC implications for government contractors, specifically concerning railway bridge and platform repair works. It addresses the GST rate applicable to subcontractors, the applicability and percentage of GST TDS alongside ITR TDS, and the eligibility to claim Input Tax Credit (ITC) on subcontractor invoices. The advice references an AAR ruling and CGST Act provisions to guide the contractor.

Sunil Reddy Somu

48 Points Posted on 10 August 2021

1) The Authority for Advance Rulings, Maharastra, Shree Construction order no 09/2018-19/B-65 dt 11.07.2018, the Authority wordings are

“Even though, we being sub-contractor providing civil construction services to main contractor effecting original works contract for Railways which is not covered in 9954 (ix) and 9954 (x), we believe that the rate applicable to us. is 12% only which is the rate applicable for Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied by way of construction, erection, commissioning, or installation of original works pertaining to,- (a) railways excluding (including substituted from 25/01/2018) monorail and metro”

Though construction of Railways is covered under clause (v), The AAR accepted for 12% slab rate for the sub-contractor.

2)Refer sec 51 along with rule 66 of CGST Act. This is based on location of supplier and place of supply.

3) Yes, you can take ITC