GST on Works contract
Fazil Omer (16 Points)
11 September 2018
What are the main features of works contract?
6 Replies
Rohit Tibrewal
(Student & Senior Accountant)
(3193 Points)
Replied 11 September 2018
As per section 2(119) of CGST Act “works contract” is defined as a contract for:
building, construction,
fabrication,
completion, erection, installation,
fitting out,
improvement, modification,
repair, maintenance, renovation,
alteration or commissioning
of any Immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract.
In simple words, any contract in relation to an Immovable property where services are provided along with transfer of goods is known as a “Works Contract”.
building, construction,
fabrication,
completion, erection, installation,
fitting out,
improvement, modification,
repair, maintenance, renovation,
alteration or commissioning
of any Immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract.
In simple words, any contract in relation to an Immovable property where services are provided along with transfer of goods is known as a “Works Contract”.
Fazil Omer
(16 Points)
Replied 11 September 2018
How to file gst return under works contract? and what about ITC?
Pankaj Rawat
(GST Practitioner)
(55052 Points)
Replied 11 September 2018
Supply of both material and labour - The supplier is engaged in supply of labour ( hired labour from outside) alongwith supply of own materials such as cement, steel, sand and other materials, then such service would be classified as a “works contract”.
ITC :
ITC for works contract can be availed only by one who is in the same line of business and is using such services received for further supply of works contract service.
Returns :
As Normal Taxpayer you can file , GSTR1, & 3b
ITC :
ITC for works contract can be availed only by one who is in the same line of business and is using such services received for further supply of works contract service.
Returns :
As Normal Taxpayer you can file , GSTR1, & 3b
Fazil Omer
(16 Points)
Replied 11 September 2018
i'm dealing with construction of road to local authority. In this case what about ITC.
Rohit Tibrewal
(Student & Senior Accountant)
(3193 Points)
Replied 11 September 2018
ITC : ITC for works contract can be availed only by one who is in the same line of business and is using such services received for further supply of works contract service.
Already said by @ Pankaj Sir
Srinivas Ch
(Sr.Accountant)
(365 Points)
Replied 14 February 2019
So here Fazil omer not eligible for ITC on material purchase because local authority is not in same line of business.
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