Service tax on Work Contrat services

[N Balachandran]

Dear sir,

Can u please clarify the contract for supply of pipes and laying for water supply project to TWAD & CMWSSB will attract GST @ 12% or !8%. if it is GST @ 12%, can we claim the refund of Excess Credit available ( Un utilised credit ) in this project. What is rate of GST applicable to Sub contractors who has been engaged for this project.

As per recent decisions taken at 20^th GST Council meeting held on 5^th August 2017.

Description of service	From	To
Works contract services provided to Government, local authority or governmental authority and in respect of post-harvest storage infrastructure for agricultural produce, mechanized food grain handling system	18% with full ITC	12% with full ITC

[KASTURI SETHI]

Rate of GST remains the same whether service is supplied by the Contractor or sub-contractor. No provision for refund because of overflowing ITC.

[Himansu Sekhar]

When the notf. Will be issued lowering the rate, the same will be applicable. Refund of unutilized credit not possible.

[Rajagopalan Ranganathan]

Sir,

The GST council has recommended in its meeting held on 5.8.2017 to reduce GST from 18% to 12% with full ITC in respect of government works contract. This recommendation will come into effect only from the date Notification No. 11/2017-Central Tax (Rate) dated 28.6.2017 is suitably amended by the Government. Till such time the GST rate will be 18% with full ITC.

[Guest]

Does it mean, GST is 12% on works contract service provided to Government authority?

AI Summary

GST rate for government works contracts may change only upon notification; subcontractors treated same and unutilized ITC non refundable The GST Council recommended lowering the GST rate on works contract services supplied to government or local authorities to a reduced rate with full ITC, but that recommendation is effective only when the rate notification is amended; until amendment the existing higher rate with full ITC applies. No refund of unutilised input tax credit is available, and the same GST rate applies to contractors and subcontractors providing the same services.