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

Price revision under GST requires supplementary or credit notes for pre-GST contracts, impacting invoicing and ITC eligibility.
Price revisions to contracts entered into before the GST appointed day require issuance of supplementary invoices or debit notes for upward revisions and may permit credit notes for downward revisions, these being treated as outward supplies and affecting tax liability only where the recipient adjusts input tax credits; contract or tender clauses control whether prices are inclusive of tax and, if silent, statutory valuation rules apply. Eligibility for input tax credit by road contractors under government contracts depends on whether the party is a main contractor or a subcontractor and on the contract terms.