GST rate Clarification for Single Residence work

[Thevarkonda Suresh]

sir

My Query is my client (Registered with GST)is doing contract work for Construction of Single Residence construction work with Material and labour (ie old house will be demolished and new single residence will be built) Query what will be GST rate either 5% or 18% and also any Inputtaxes can be claimed from registered suppliers like supply of sand, bricks, cement, and Electrical and Plumbing items etc . Experts advice Please

[Shilpi Jain]

This person is not a promoter. He is like a works contractor. 18% would be applicable with ITC.

[KASTURI SETHI]

You have mentioned as "Old house will be demolished.".

Demolishing is a service under SAC 995431.

This aspect has to be taken care of.

[Padmanathan KV]

The works contract will be taxable at 18% and he shall be eligible for ITC. 

Ld Kasturi Ji,

Won't the demolition be part of the composite supply, the predominant supply being works contract? 

[KASTURI SETHI]

Sh.Padmanathan Kollengode Ji,

Yes. Demolition will be covered under composite supply. 

AI Summary

Works contract taxation: single-residence construction attracts standard GST with input tax credit; demolition treated as composite supply. A registered contractor carrying out single-residence construction with supply of materials and labour is taxable as a works contract at the standard works-contract rate and may claim input tax credit on purchases from registered suppliers. Demolition of the old house is classified as a demolition service but, when combined with the construction works, forms part of a composite supply with the works contract as the predominant element and is taxed accordingly.