Latest Query & Reply

Respected Sir,

As my customer is govt work contractor and working with huge amount of contract.

please suggest me

1. What is a GST rate of work contractor to be charge in bill to govt.?

2. Can I take input credit of Materials like (Cement, Steel etc) which are used in construction also?

3. If I make separate bill of material and contract fee what would be rate then. 

Reply

Dear Sir,

1. Rate of GST on government works contract is depends upon the nature of work, there are different GST rate for different kind of construction work. For example, for construction of canal, dam or other irrigation work GST rate is 12% while for construction of civil structure GST rate is 18% and so on.

2. Yes, when work is done by contractors on behalf of government then contractor will be eligible for input tax credit on material purchased in execution of contract.

3. This service is covered under composite supply, therefore the contractor should issue a common invoice for material and contract fee instead of separate invoice.