gst on works contracts

[giri gattupalli]

respected sir,

where payment to a works contractor made in parts for a ongoing huge works ,payment of GST not made to contractor along with part payment. in this situation whether there is liability to pay gst with contractor on partpayment or he can wait for realease of gst by concern contractee department.please give your valuable opinion.

thank you sir

[Ganeshan Kalyani]

Sir, contractor would be raising an invoice on the recipient along with GST. The contractor is liable to pay GST to the Govt. If you hold the GST part, still he has to make the payment of GST to the Govt.

[KASTURI SETHI]

I agree with Sh.Ganeshan Kalyani Ji. As per Section 9(1) of CGST Act, it is a statutory duty of the supplier of services or goods or both to collect GST from the service receiver/buyer of the goods and deposit into Central Govt. Account. Pay tax on part-payment also. It is a wrong practice to withhold the amount of GST. The service provider can charge interest from the service receiver and pay to Govt. Govt. has given sufficient time to deposit GST. GST has to be deposited by 20th or 24th of the following month.

[Himansu Sekhar]

For continuous supply of service please refer to Section 31 of CGST Act,2017. As appearing from the description when your works have been linked with the payments, the liability arises even if the GST has not been paid to the service provider.

AI Summary

Contractors Must Invoice and Pay GST on Part Payments, Even if Withheld by Contractee, per Sections 9(1) & 31. A query was raised regarding the liability of paying GST on part payments to a works contractor. The consensus among the responders was that the contractor must raise an invoice including GST and is responsible for paying GST to the government, regardless of whether the GST portion is withheld by the contractee. It was emphasized that withholding GST is incorrect, and the contractor can charge interest to the service receiver if GST is not paid timely. References were made to Sections 9(1) and 31 of the CGST Act, highlighting the statutory duty to collect and deposit GST promptly.