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Query Answer
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Dear Sir,

My query is regarding works contract, Sir, please explain me the calculation of GST in case of builders. How will be the process in newly register case?  Please guide us how & when to file the GST returns if a new housing project is undergoing. Can we get the rebate on purchase of materials before completion? Please explain how will be the procedure.

Reply

Dear Sir,

Schedule II states that Works Contract amounts to supply of services. Composition scheme is not available to works contractors as it is treated as service under GST.

Rate on works contract is 18% for Construction of complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate. Rate of GST is @12% in case of supply of Works contract to the Government, local authority or a governmental authority.

Input Tax Credit— As per section 17(5) of CGST Act, Input tax credit shall not be available in respect of works contract services availed by a person for constructing an immovable property (other than Plant and Machinery). ITC for works contract can be availed only by those who are in the same line of business and is using such services received for further supply of works contract service (e.g. ITC in respect of bill raised by sub-contractor is allowed to the main contractor)

Return—

1. GSTR-1-monthly return containing details of Outward Supplies

2.GSTR-3B-must be filed by everyone who has registered for GST, containing summary of information about sale and purchase, available input tax credit, tax payable, tax paid is to be furnished

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