GST ON works Contract

1. Work Contract
Estimate
1.DSR is inclusive of octroi, royalty, excise duty, Sales Tax
(VAT)
2.DSR is not inclusive of Service Tax, as such contractor
was required to pay service tax directly to tax authorities &
department used to reimburse it.
3.Total taxes on works in Pre GST era was to the tune of 24-
28%.
4.In GST era the GST on works contract is 18% for PB.
Prasar Bharti is taxable business entity.

2. Work Contract
Estimated Tax in Pre GST Era on Building Work
1.
2.Excluding Electrical items the tax can be
assumed as 24% in Building work
3.The taxes in Building work excluding services
can be assumed to be = 18%
Excise (on cement, steel & other items) - 12.5%
VAT - 7.5%
CST - 1%
Service Tax - 6%
Total - 27%

3. Works Contract
Estimate in GST - Era
1.The taxes in DSR may be assumed to be 18%
2.Present GST on Building work in PB is 18%.
3.Therefore any estimate based on DSR in GST era can be
presumed to be inclusive of GST @ 18% (inclusive of all taxes).
4.The estimate in the end will show taxes separately.
5.Say Estimated cost = 100 based on DSR
6.Taxes are as per rule 35 of CGST rules.
1. Cost excluding taxes =
100
= 84.8
118
2. CGST = 7.6
3. SGST = 7.6
Total = 100.00

4. Work Contract
Justification in the GST Era
1.The contractor uses material & labour as input and he is charged
taxes on input tby supplier of materials/ labour. He will get ITC on
taxes paid to suppliers.
2.The contractor supplies works contract service, which is out put
supply of contractor. He is liable to pay tax to government on out
put of works contract.
3.Net tax liability of contract = (out put tax liability on value of
works contract– ITC on materials & services.)
4.Prepare the justification on MR.
5.Add Justified Amount on MR and Net tax liability of contractor.
6.Justification is (Justified Amount on MR + out put tax on justified
amount – ITC on materials & services.)

5. Work Contract
NIT Conditions
1.The GST has been implemented by the Government of India
with effect from 1st
July 2017. The rates quoted by the tenders,
shall be firm and inclusive of all taxes including GST.
2.Tenderer shall examine the various provisions of CGST Act,
2017 IGST Act, 2017/ UGST Act – 2017/ SGST Act 2017 of the
respective state and up to date amendments issued from time to
time and other applicable taxes before bidding/ tendering. The
tenderer shall also confirm to the rules made under these Acts.
3.The tenderer shall ensure that benefit of Input tax credit (ITC)
likely to be availed by them is duly considered by them while
quoting rates.

6. Work Contract, NIT
4. The contractor shall submit the invoice of the work
executed as per rule 46 of the CGST rules. The taxes will
be calculated as per rule 35 of CGST Rules 2017.
5. As contractor’s rates are inclusive of all taxes, no
reimbursement of any tax shall be made to the contractor.
The clause 37 of GCC of NIT/contract stands modified
accordingly.
6. TDS on income tax, labour cess and other statutory
deductions shall be made at source as per prevalent
laws. TDS on GST as & when becomes applicable will
also be deducted as per relevant GST Act/ rules/
notification.

7. Work Contract
INVOICE
1.The contractor shall submit the invoice of the work done as per rule 46 of
the CGST rules.
2.The contractor shall mention his invoice number, GSTIN number and also
the GSTIN number of the department.
3.The invoice shall indicate CGST, SGST/ UTGST or IGST as per rules.
The taxes will be calculated as per rule 35 of CGST rules 2017.
4.Say Gross Amount of work done as per contract rates = Rs. 100
5.Amount excluding taxes =
6.GGST = x9
7.CGST = x9
8.Payable amount including GST And Taxes= 100. Further deductions shall
be made as per statutory provisions/contract.
100
118
100
118
100
118

8. Work Contract
1. The contractor shall file the invoice details in GSTR-1 on
GSTN portal and shall pay the GST to the Government at
the time of filling the monthly return.
2. DDO will indicate the invoice details of the contractor in
GSTR-2 of the PB. The GSTR-2 will be sent to SNO of
AIR/ DD within the stipulated date as circulated by PB.

9. Work Contract
Deposit Work
1. The CCW will submit estimate to client department inclusive
of departmental charges & GST & other taxes.
2. The GST will however be worked out & indicated in the
estimate.
3. GST will be applicable on full amount ie [Estimated cost
without GST + Departmental charges].
4. The CCW will make payment to contractor as per the
invoice of contractor.
5. CCW will submit invoice to client department adding
departmental charges and indicating the GST.
6. The CCW will mention AIR GSTIN and GSTIN of the client
organization (if registered)

10. Work Contract
Deposit Work
7. The input and output invoice details shall be sent to SNO
of AIR in GSTR-2/GSTR-1 timely so that PB /client
department may get benefit of ITC wherever permissible.
8. The GST on output supply charged from client department
will be paid to the Government by PB after availing ITC.
The PB will get ITC only when contractor files his invoice
details on GSTN portal.

11. THE END
THANKS