WORKS CONTRACT

[AJIT Tiwary]

Dear Sir,

my client is a road contractor and the gst rate applicable @12% but those projects which has been started before 01/07/2017 and still work in progress. the old agreement related to cost has not been revised by the state government after implementation of gst. when we produce bill for payment the department determine it inclusive of gst. i can illustrate it as follow:

Suppose overall contract price= 150

pre-gst

Bill produce= ₹ 100

Vat Deducted=Rs. 4( Vat @4%)

Balance receive= 96 (assuming that tds has been deducted)

post gst

Bill produce= ₹ 50 (as per department it is inclusive of gst)

our turnover i.e net of tax (50/112*100=44.64 and balance amount will be considered as gst)

in this situation what we should do, can we make representation to commissioner of goods and service tax

on the other part the road contractors are eligible for input tax credit.

kindly resolve it soon

thanks

AI Summary

Contractor Queries GST Rate and ITC Eligibility for Pre-July 2017 Projects; Considers Section 142 and GST Council Advice A road contractor is concerned about the applicable GST rate of 12% for projects initiated before July 1, 2017, where the state government has not revised the cost agreements post-GST implementation. The contractor's billing is considered inclusive of GST by the department, affecting the turnover calculation. The contractor seeks advice on whether to approach the GST Commissioner and questions the eligibility for input tax credit (ITC). Respondents discuss provisions under Section 142 of GST laws, contract terms, and the distinction between main and sub-contractors regarding ITC eligibility. There is a suggestion to raise the issue with the GST Council for clarification.