GST RATE & ITC

[SUSHEELA CHOUDHARY]

SIR ONE OF MY CLIENT WHO IS WORK CONTRACTOR RECEIVED CONTRACT FOR CONSTRUCTION OF GOVERNMENT SCHOOL HOW MUCH GST IS TO BE CHARGED ON ABOVE SERVICE AND WHETHER IS WE ELIGIBLE FOR ITC ON INPUT SERVICE ON MATERIAL WHICH WE WILL BUY FOR CONSTRUCTION OF GOVERNMENT SCHOOL. PLEASE REPLY BE ON THE ABOVE ISSUE.

[KASTURI SETHI]

Only pure labour for supply of construction service to Govt. Under Works Contract Service is exempted. Otherwise taxable. If service is exempted, no ITC is available.

AI Summary

Works contract exemption for pure labour supplies precludes input tax credit when the service is exempt.
Applicability of GST on a works contract for construction of a government school depends on whether the supply is pure labour; pure labour supplies to the government are exempt while other works contract supplies are taxable. Where the service is exempt, the contractor is not eligible to claim input tax credit on inputs or input services used for that exempt service.