GST on Works Contract

[Ethirajan Parthasarathy]

Earlier as per entry No.3(vi) of Notification 11/2017 of Central Tax (Rate) dt: ­28-06-17 services in the nature of works contract rendered to :

a) Central Government

b) State Government

c) Union Territory

d) Local authority

e) Government authority and;

f) Government entity

attracted concessional GST rate of 12%.

An amendment through Notification No.15/2021 of Central Tax (Rate) dt:-18/11/2021 out of the above list of 6 service recipients two viz.. Government entity and Government authority are removed

Hence, in my view such services to City Corporation or PWD department will continue to be 12%. Is this view correct?

AI Summary

GST rate on works contract: entitlement depends on whether the recipient qualifies as Central/State/UT or local authority under amended notification.
Concessional GST applicability to works contracts depends on whether the recipient is within the preserved categories - Central Government, State Government, Union Territory or local authority - after Notification 15/2021 removed 'government authority' and 'government entity'. One view holds municipal corporations and PWDs remain eligible as local authority and State Government respectively; another contends the omitted, separately defined terms may have been intentionally excluded, so careful reference to definitions in the rate/exemption notifications is necessary to determine entitlement.