Govt Civil Contracts

[Tanmay Sharma]

Dear Readers Greetings,

What is the GST 'Taxable Amount' And 'Tax Amount' in the following case of Govt Civil Contractor?

Say, Gross Amount (also tendered amount) for a project = 1,00,000/- including all taxes complete, alloted to the contractor by a govt Deptt. say PWD. (TDS@2%=2000/-,Labour-cess@1%=1000/- and income tax@2%=2000/-) total of 5000/- is deducted from the above Gross Amount by the govt departmentand remaining 95000/- is paid to the contractor.

What is the tax amount?

AI Summary

Contractor Seeks Clarification on GST Calculation for Government Project; GST Rate 12%, No Deductions Allowed Under CGST Act A government civil contractor is seeking clarification on calculating GST for a project with a gross amount of 100,000, which includes all taxes. The query involves understanding the GST taxable amount and tax amount after deductions for TDS, labor cess, and income tax totaling 5,000. Responses indicate that no deductions are allowed from the transaction value under the CGST Act, with GST calculated on the gross amount. The GST rate for government civil construction is confirmed as 12%. Further discussion involves whether GST applies to royalty deductions from contractors without mining rights, with a consensus that royalty services are under Reverse Charge Mechanism (RCM).