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Issue ID : 112486
- 0 -

Composite supply

Date 01 Aug 2017
Replies11 Answers
Views 2620 Views

Dear expert,

I would like know what is the rate of tax for contract under painting work. The paint is under 28% and the labour under 18%. Here which one is principal supply.

Thanks in advance.

11 answers
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Old Query - New Comments are closed.

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- 0
Replied on Aug 1, 2017
1.

Principal supply is paint for painting work, so 28% according to my view.

- 0
Replied on Aug 1, 2017
2.

Generally for composite tax cases, principal rate of tax only applies.

Its better to enter works contract with the contractor where he will get paint and bill you. In such case 18% tax shall be levied.

(I hope the painting is for construction activity,pls read Works contract definition)

- 0
Replied on Aug 1, 2017
3.

Thank u do much for your kind response.

- 0
Replied on Aug 1, 2017
4.

Dear Querist,

In the example cited by you, GST @18% is applicable.

- 0
Replied on Aug 1, 2017
5.

If your are doing contract work for Painting Company then 18%

Or

But if you do painting work for other house / Office then to purchase paint 28% would be Applicable & for your services 18%

Please correct me if I am wrong

- 0
Replied on Aug 1, 2017
6.

Sh.Kishan Barai Ji,

Sir, You are absolutely right.

- 0
Replied on Aug 1, 2017
7.

In such situation ITC overflows and no refund is admissible.

- 0
Replied on Aug 1, 2017
8.

If you are executing works for Immovable property it is termed as Works contract and 18% rate is applicable (Ref 2(119) for definition of works contract).

If you are not covered under the above definition, you will fall into composite supply under sec.8 where principal supply concept will come into picture.

Under composite supply since supply is rated @ 28%, your further works on it may also be charged under 28%.

- 0
Replied on Aug 1, 2017
9.

Sh. Vamsi Krishna ji,

Thanks for throwing more light on the issue.

- 0
Replied on Aug 1, 2017
10.

Its pleasure to be part of forum having experts.. welcome sir..

- 0
Replied on Aug 1, 2017
11.

Dear expert,

Thanks a lot for your valuable instant reply and support sir.

Old Query - New Comments are closed.

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