Gst on works contractors

268 views 5 replies

CA Manoj Kumar Choudhury

3 Points Joined December 2016

Dear Members,

One of my client who is a works contractor engaged in various projects of the Government of Odisha from different departments namely, ITDA,DRDA, PWD and Rural Works Departement. He signed various contracts (Works Contracts) before the implementation of GST i.e. before 01.07.2017. He got part payments on those works as per the existing Law (VAT) before implementation of GST.

Presently he is drawing his part payments from the above mentioned departments. But now the Govt departments are not deducting VAT (5%) on those bills and nor they are paying GST Extra.

My question is how can I show the receipts in GSTR3B and GSTR-1 returns ?

Do I require to show it in my GST Returns ?

Or I have to show it as Non-GST Outward Supply.

Please Guide.

Dear Members,

Presently he is drawing his part payments from the above mentioned departments. But now the Govt departments are not deducting VAT (5%) on those bills and nor they are paying GST Extra.

My question is how can I show the receipts in GSTR3B and GSTR-1 returns ?

Do I require to show it in my GST Returns ?

Or I have to show it as Non-GST Outward Supply.

Please Guide.

Replies (5)

Vinod Babu

24196 Points Joined May 2018

In Gst regime, the government won't deduct any gst amount but it is work contractor's liabilities to pay gst amount on his completion of his work.
you must raise a bill for your services done after the completion of the work and show the same in gstr3B returns and pay taxes.

CA Manoj Kumar Choudhury

3 Points Joined December 2016

In GST Regime there's a Provision for the Govt Departments to enroll as a deductors of GST.

If the Contract is entered after the implementation of GST, all the Govt. Departments are Paying GST Extra on the Works. At that time the Works Contractor needs to Charge GST @ 12% of the Bill. After that the Department which needs to get themselves enrolled as GST Deductors have to deduct 2% of the Gross Billed amount (For the time being it is postponed by the GST Authorities).

My question belongs to the Contracts entered into Pre-GST era (i.e. before 01.07.2017). At the time of signing of contracts there was no GST Extra. So the department won't be paying GST -Extra to the Works Contactor. If the works contractor shows this as his Taxable Outward Supply he needs to pay GST @ 12% extra (which he never received ).

So my question is How to Show the Receipts from WORKS CONTRACT (Pre-GST Contracts) in the GST Returns (GSTR-3B and GSTR-1) ??

satyaban

Article Assistant

25 Points Joined May 2011

Hi Did you got any clarification with respect to this query or guidance from any other sources ?? please response even i have the same doubt.

satyaban

Article Assistant

25 Points Joined May 2011

There is a letter from ministry of finance for entering into a supplementary agreement with contractor revising the rate as per SOR-2014 revised. and pay GST accordingly to the contractor. one of my client got the GST at final bill. but i have the same doubt how the GST needs to be discharged for the bills received against which no GST was paid by division.

Rajendra Prasad

Employee Private

1913 Points Joined July 2017

It is clear what ever the amounts received in the GST regime are Taxable and not exempted. Dealer has to discharge his liability, if the tax amount receive are not. If the receipts has not shown further we have to face lot of problems from the department.

In the same scenario we have been paid taxes valued as per the CGST Rule 35 i.e., value of supply inclusive of taxes and paid taxes. We have faced this issue in 5 states. We have made many correspondences. One thing is clear with out entering into supplementary agreements by mutual agreement with concern departments for revision of rates for reducing the embedded taxes, it is not possible to get the GST amount as applicable. We have got GST amounts for all the works.