The GST department has notified the GST rate revisions, recommended at the 47th GST Council meeting held on 28th & 29th June 2022. Correspondingly CBIC issued Notification No. 03/2022 on 13th July 2022 amending Notification no. 11/2017 dated 28th June 2017, wherein GST rates for various construction services have been revised. Before this, the rates were amended for "Government authority and Government entity" vide notification no. 15/2021 dated 18th November 2021.
Relevant changes in the said notification are reproduced as below:
"against serial number 3, in column (3), -
(a) items (iii), (iv), (v), (va), (vi) and (ix) and the corresponding entries relating thereto in columns (4) and (5) shall be omitted;
(b) against items (vii) and (x), for the entry in column (4), the entry "6" shall be substituted;
(c) in item (xii), for the brackets and figures "(iii), (iv), (v), (va), (vi), (vii), (viii), (ix)", the brackets and figures "(vii), (viii)," shall be substituted;" (Copy of notification, 11/2017 dated 28th June, 2017 enclosed)
The impact of above notification is described below:
1. GST Rate increased from 12% to 18%
Construction services of serial number 3, mentioned in item (iii), (iv), (v), (va), (vi) & (ix) of notification (11/2017 dated 28th June 2017) for which GST rate were 12% (6% CGST & 6% SGST) now omitted and will be covered under residual clause i.e. under item no. (xii), where rate of such services is 18% (9% CGST & 9% IGST), which is being effective from 18th July 2022.
2. GST Rate increased from 5% to 12%
Construction services of serial number 3, mentioned in item (vii) & (x) of notification (11/2017 dated 28th June 2017) for which GST rate were 5% (2.5% CGST & 2.5% SGST) now substituted with new rate of 12% (6% CGST & 6% IGST), which is being effective from 18th July 2022.
3. Services under residual clause has been increased (item no. (xii),18% (9% CGST & 9% SGST))
Earlier it was like " Construction service other than (i), (ia),(ib),(ic),(id),(ie),(if),(iii),(iv),(v),(va),(vi),(vii),(viii),(ix),(x) and (xi)" of serial no. 3 covers under rate of 18% now it will be read as " Construction service other than (i), (ia),(ib),(ic),(id),(ie),(if),(vii),(viii),(x) and (xi)" at the rate of 18% (9% CGST & 9% SGST)
Updated version of the Notification No. 11/2017-Central Tax (Rate) dated the 28th June, 2017 after giving effect of Notification no.15/2021 dated 18th November 2021 and Notification no. 03/2022 dated 13th July 2022 (only relevant portion i.e. Serial No. 03 related to "Construction services") is attached for reference.
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