Article 17(5)(d) provides that goods or services, or both, which a taxable person receives for the construction of immovable property (other than a plant or machine) for his own account, even if those goods or services, or both, are used in the course of a commercial activity or promotion. Total delivery of construction contracts that are delivered to the government through the repair or construction of monuments, dams, canals, government or the disposal of wastewater treatment systems, water supply or pipelines. Clause (xii) covers all other works contracts not covered or mentioned above. In general, all contracts between private parties such as the construction of buildings, warehouses, etc. fall under this entry. Thus, the works contract is applicable to fourteen types of contracts to be performed on immovable property. These contracts are construction, construction, manufacturing, completion, assembly, installation, equipment, improvement, modification, repair, maintenance, renovation, conversion or commissioning. (a) a civil structure or other original works intended primarily for purposes other than commerce, industry or other undertakings or professions; ABC enters into a contract with XYZ for Rs 50 Crores (plus GST) for the construction of a turnkey warehouse, i.e. including all purchases and assemblies. However, XYZ indicates that cement and steel must be supplied by XYZ, which corresponds to a value of Rs 15 crores. In this case, although the ABC is supposed to charge 35 crore of rupees, the tax value of the GST is 50 crore of rupees and, therefore, the GST must be charged a value of 50 crore rupees. (Article 15(2)(.b)). However, the theses formulated in this way in the form of installers do not seem to have addressed the following fundamental points: A) Why and how a transaction of “sale and purchase” of a UNIT (apartment), which is somehow a “real estate”, could be treated as a “construction contract” in a real estate complex; in order to wrongly validate the collection of VAT, which has been in force since the transition to the GST? B) Why and how the constitutional amendment invoked by him, on the basis of which a means was found to justify the collection of VAT (by considering such a “sale and purchase transaction” as a “construction contract”), could in any event be considered applicable to the GST legislation.

As far as is known, the underlying GST regime differs substantially in significant terms from the above-mentioned “presumption concept” adopted for the VAT system. Overall, there appears to be a disconnect between the different aspects covered; to the extent that no attempt has been made to give definitive guidance to one and all the parties concerned! If so, the author may wish to share his or her independent views, in particular on the inadequacy or alternative mode of the two samples, which are still being discussed in important professional circles; for this purpose, related material, which is free of charge, in the form of articles, etc., may be publicly available – especially on this website itself – be useful !!! CONTINUE TO. Although works contracts are a single document, the different activities associated with the contract may be taxed differently depending on the type of work. This leads to many ambiguities regarding processing and controllability, which leads to many legal conflicts over construction contracts. However, the implementation of the GST has clarified this issue and put an end to the legislative confusion. If no reduction/composition is foreseen, this can lead to a significant increase in the tax burden, especially if such a works contract is taxed at the standard GST rate (which is 18%) and even if it is subject to a lower tax rate (12%). For services provided under a construction contract, two GST rates have been set: 18% and 12%. Annex II explains how to deal with the “provision of services” where the works contract has been determined, e.B the construction of a building, civil structure, complex or part. Or it may be information about a complex or building offered for sale to a buyer, in whole or in part, with proof of completion or a certificate of completion. In this construction case, there is no GST rate for construction contracts, since the delivery has become land and the GST cannot be levied on the sale of real estate. This approach of treating works contracts as a service rather than a supply of goods has clarified the GST rate for works contracts.

However, in the case of entry No. 234 of Annex I to Notification 1/2017, all of the above items, if sold separately, are taxable at 5%. Accordingly, an explanation was given in entry No 234 that, where the goods referred to in that heading are supplied by a supplier at the same time as supplies of other goods and services for which a taxable service within the meaning of paragraph 234 is supplied. 38, as stated above, the value of the supply of goods is, for the purposes of that entry, deemed to be equal to 70% of the gross consideration invoiced for all those goods. The supplies and the remaining 30 % of the gross consideration invoiced shall be deemed to be the value of that taxable service. 2. If a tax rate of 12% GST or 18% GST is to be calculated. Although Article 54(3) refers to the right to a refund in the case of a cumulative input tax credit, there is a limitation of the refund only in respect of inputs and not for input services. Therefore, in my view and in practice, reimbursement of accumulated ITC cannot be claimed by contractors when contractors claim ITC in input services. For services provided under a construction contract, two GST rates have been set: 18% and 12%. The GST rate for works contracts for different categories is as follows: For services, the delivery time is measured in accordance with §§ 13 and 31 of the CGST Act.

Section 13 states that the timing of the provision of services is determined by the first of the following provisions: According to the above definition in the GST Act, it has been made very clear that the term “construction contract” applies only to the 14 types of contracts related to real estate. All other contracts such as. B the manufacture of steel products or similar production, repair work in the automotive workshop is not included in the employment contract, but as a composite supply within the meaning of you/s 2 (30) of the CGST Law, 2017. Due to the non-reduction, the tax burden has increased significantly. This applies in particular to the works contract, which is taxed at the standard GST rate (18%). This happens despite the fact that it is subject to a lower tax rate (12%). This treatment of the works contract as a service and not as a supply of goods will lead to an indispensable clarification of the works contracts. Under the previous regime, different states had different systems for VAT.

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