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Works contract service

06 February 2018

Is the construction service provided by builder to prospective buyer of flat booking, as "works contract service" ?
as there is also transfer of property in goods is involved (note: consideration received before completion certificates )

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10 Replies

CA Shilpi Jain (Indirect taxation) (155 Points)
Replied 07 February 2018

Yes in terms of entry 5(b) of schedule II to the Act.

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Amit Jimudiya (47 Points)
Replied 07 February 2018

it is liable to GST but shall it be classified under "works contract service "?

Dhananjay saraf (Chartered Accountant) (254 Points)
Replied 07 February 2018

You can classify under HSN 9954- Construction Service

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Amit Jimudiya (47 Points)
Replied 07 February 2018

yes but why we can't classify it under *works contract service* as in this case property in goods is also transfered.

aisha kapoor (90 Points)
Replied 07 February 2018

but immovable property is not a good.
in the def of good only movable items are included.

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Amit Jimudiya (47 Points)
Replied 07 February 2018

Yes i agree but there is many goods which transferred during such construction service such as cement,stones,tmt bar pipes etc..so why can't we classify it under "works contract service"?

aisha kapoor (90 Points)
Replied 07 February 2018

i think that if materials are provided by the recipient to the supplier and the supplier only does the construction part then it will not be considered as a works contract and treated as a service as per sch 2(5)(b)

aisha kapoor (90 Points)
Replied 07 February 2018

where both material and construction service is provided by the contractor then it shall be a works contract.
even though in gst regime..in both the situations it is a supply of service

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aisha kapoor (90 Points)
Replied 07 February 2018

Do you think as the correct answer?

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CA Shilpi Jain (Indirect taxation) (155 Points)
Replied 08 February 2018

When there is a specific classification the same shall be preferred over a generic classification. In the present case works contract is general and construction service is more specific. Hence it shall be preferred over works contract service

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