Works contract under GST

[Dinesh Vaswani]

We have our registered office in Thane , Maharashtra & we are in process of finalisation of a works contract order in Himachal Pradesh for supply of goods & services of centalised Airconditioning systems for the plant on turnkey basis, project duration is approximately 4 months. Do we need to take seperate registeration in Himachal Pradesh? If No, kindly let us know how are we going to claim TDS deductions, what certificate will be issued by service recepient . Also let us know about reqt. of E way bill for movement of goods which are required for execution works contract.

With Warm Regards,

Dinesh V

[YAGAY andSUN]

This can be understood through appended instance:-

suppose a supplier makes a supply worth ₹ 1000/- to a recipient and the GST @ rate of 18% is required to be paid. The recipient, while making the payment of ₹ 1000/- to the supplier, shall deduct 1% viz ₹ 10/- as TDS. The value for TDS purpose shall not include 18% GST. The TDS, so deducted, shall be deposited in the account of Government by 10th of the succeeding month. The TDS so deposited in the Government account shall be reflected in the electronic cash ledger of the supplier (i.e. deductee) who would be able to use the same for payment of tax or any other amount. The purpose of TDS is just to enable the Government to have a trail of transactions and to monitor and verify the compliances.

AI Summary

TDS on contract payments must be deducted from invoice value excluding GST and credited to supplier's electronic cash ledger. The reply explains that the recipient must deduct TDS from payment amounts exclusive of GST, deposit the TDS to the Government by the tenth of the succeeding month, and that the deposited TDS appears in the supplier's electronic cash ledger for use against tax or other liabilities; the TDS mechanism serves to create a transactional trail for compliance verification. The reply does not address State registration, the certificate to be issued, or e way bill requirements.