Impact on project cost

The result depends on whether ₹1,00,000 is GST-inclusive or GST-extra, and on the contract’s tax and price-adjustment clauses. Assuming the entire work is taxed at the revised rate of 18%:

₹1,00,000 including GST: If the price is fixed and GST-inclusive, the total payable ordinarily remains ₹1,00,000; the taxable value reduces to ₹84,745.76 and GST is ₹15,254.24. Whether the contractor can claim a higher amount depends on the contract and applicable change-in-tax provisions.
₹1,00,000 plus GST: The base work price remains ₹1,00,000 and GST at 18% is ₹18,000, making the total ₹1,18,000. The GST increase is ₹6,000 compared with 12%, but it does not by itself increase the agreed pre-tax work price.

The revised rate must actually apply to the relevant supply under GST time-of-supply rules; the work completion date alone may not determine the rate. Review the agreement, invoice/payment timing and any tax-change clause before settling the amount.

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