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Query Answer
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Contractor has completed Govt. work (P.W.D) of Rs.6.5 Cr after July-2017 To March-2018, tender of which was sanctioned before implementation of GST regime i.e. during VAT regime in which there is a provision of T.D.S applicable @ 2%. No T.D.S has been made on receipt of Rs.6.5 Crore.

My query is how to calculate GST on contract receipt of Rs.6.5 Cr. Whether we have to calculate GST 12% including in contract receipt of Rs.6.5 Cr or excluding GST @12%.

Reply

Government generally enters into all inclusive contracts where the price quoted is inclusive of all taxes.  As stated above, the govt. tender was sanctioned before GST implementation, therefore, govt. will not bear extra burden of GST on the predetermined contract price i.e. 6.65 crore. Hence, contract price is inclusive of GST.

Alternatively if the contractor wants to show 6.65 crore as an amount of turnover excluding GST, he can raise an invoice of Rs. 6.65 crore plus 12% GST, but burden of GST have to bear by contractor.

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