14 June 2018
Dear Experts my friend is running Constructions of Individual Houses. His services includes (both Material + Labour) for construction he has purchased so many things in his registered firm name and after completing the work he handed over the position to owner of the residential property. My clarification is 1) whether my friend availed ITC on Purchases and pay the difference GST to the Government authorities. 2) What rate should be applicable on the above Works contract Service. Expert opinion is needed. Thanks in Advance.
14 June 2018
The rate of tax applicable on construction of single residential house which is not part of residential complex (apartment) is 12%. In the present case the consideration received does not include the value of land, therefore, the standard deduction of 1/3rd for land is not allowed. Input tax credit can be claimed on inputs, input services, capital goods procured to use in the execution of said construction activity. Balance tax if any has to be paid in cash.
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