RATE OF GST FOR SUB CONTRACT OF GOVERNMENT CONTRACT ALLOTED TO CONTRACTOR

[KERAGODEGOPALARAO ANANTHARAO]

A contract work of the government is allotted to a contractor, for which the rate of GST is 12%. The contractor has subcontracted the work to the subcontractor.

What is the rate of tax for contract work done by the sub-contractor whether 18% or 12%?

AI Summary

Subcontractor's GST Rate Clarified: 18% for Non-Government Services; 12% Concessional for Specific Projects Like Affordable Housing A government contract with a 12% GST rate was subcontracted, raising questions about the applicable GST rate for the subcontractor. It was clarified that the subcontractor's services to the contractor are not considered government services, thus attracting an 18% GST rate, although the contractor can claim Input Tax Credit, making it revenue-neutral. However, certain conditions allow a 12% concessional rate for specific projects like affordable housing. Notifications and amendments, such as Notification No. 1/18-CT(R) and others, were referenced to support these points, emphasizing the importance of reviewing recent circulars for any updates.