works contract

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Arjun Tripathi

146 Points Posted on 21 September 2017

Sir,
I am govt contractor.I have taken contract of sanitation arrangements. In this contract i have purchased all things from gst non registered person.
If tender amount is 6 lacs but have quoted 1% below as 5.94 lacs as per 12% gst my tax liability will be approx 72000 rs.as i have purchased goods( sand,bricks,pipe etc) which are required for works contract from gst unregistered person I have followed RCM ( as on bricks,sand,pipe etc)and Will pay 60000 rs gst under RCM
so remaining as 72000- 60000=12000
1)Above calculation is correct?
2)Can I avail avail ITC on RCM and this type of govt contract?
3) 12%GST will be on 6lacs or below quoted amount which is 5.94 lacs?

Replies (3)

Shashikant Sharma

Study

219 Points Posted on 21 September 2017

1. Yes, your calculation is correct.

2. Yes you can avail ITC on this type of contract. No issue about ITC.

3. GST will calculate on 6 Lac, and i think rupees 6,000 that is under quoted to you is TDS under GST because there is a provision of deducting TDS @ 1% any supply to govt. and you are eligible to claim that amount also :- 72000-6000-12000

RAMESH KUMAR SINGLA

PROFESSIONAL

1463 Points Posted on 21 September 2017

There does not seem to be any confusion about your tax liability. On purchase of goods from non registered suppliers, you have paid total GST of Rs. 60,000/- and you will take credit of that under RCM. Further, you are paying Rs. 72,000/- as GST while making forward supplies to the govt. The differential amount of Rs. 12,000/- has to be paid by you from you pocket in cash. There is no bar to avail ITC except restrictions in section 16-18 of CGST Act.

further, GST on outward supplies to the govt. will be taxed on the value of consideration to be received from the recipient of service i.e. govt. Since you are receiving Rs 5.94 lakhs only, GST is to be paid on this value.