Works contract

18% standard GST rate , yes you can avail ITC on purchases

18% tax, ITC not availed in work contract

18% you are claim it on purchase

Section 17 (5)( c) : Input Tax Credit shall not be available in respect of the following, namely: “ works contract services when supplied for construction of an immovable property ( other than Plant and Machinery) except where it is an input service for further supply of Works contract service”The restriction does not apply to plant and machinery and also in case the input services are further used for supply of Works Contract service( Contractor can avail the ITC in respect of services availed from the sub-contractor

if  Govt.Agency has given a contract to a registered civil work contractor, for construction of their building, do they have to pay GST? because if we are doing any expense above Rs.5000, we have to pay GST on the same. So govt agencies/authorities  are not bound to pay any tax?

@ vishal,sudhakar (107) ”works contract” means an agreement for carrying out for cash, deferred payment or other valuable consideration, building, construction, fabrication, erection, installation, fitting out, improvement, modification, repair, renovation or commissioning of any moveable or immovable property

@ vishal, sudhakar Section 16(9) provides that Input tax credit shall not be available for the following in relation to works contract: (c) goods and/or services acquired by the principal in the execution of works contract when such contract results in construction of immovable property, other than plant and machinery; (d) goods acquired by a principal, the property in which is not transferred (whether as goods or in some other form) to any other person, which are used in the construction of immovable property, other than plant and machinery;

work contract itc

work contractor can utilise the ITC on purchases made by him.