Contract receipt including GST-how to calculate taxable supply

[SUSHIL BANSAL]

Sir,

our client is providing woarks contract services to state govt departments.The work contract terms says that the tender amount will be including GST & the GST will be borne by the contractor i.e. the department is not giving us separate amount for GST.

While filing 3B we are taking taxable supply net off GST ie. amount as reported in GSTR-7 by the deducter divided by 1.18 & then on the net amount the 18% GST is worked out. Due to this amount as per GSTR-7 & amount as per 3B is mismatched & due to that GST department issued notice to explain the difference.Plz guide whether we are filing GSTR 3B in correct way or we should pay GST on the gross amount. any notification/circular in the matter.

AI Summary

Contractor Faces GST Filing Issues Due to Tender Terms; Rule 35 of CGST Rules, 2017 Suggested for Resolution A contractor providing works contract services to government departments is facing issues with Goods and Services Tax (GST) calculations. The contract specifies that the tender amount includes GST, which the contractor must bear. While filing GSTR-3B, the contractor calculates taxable supply net of GST, causing discrepancies with GSTR-7, leading to a notice from the GST department. Respondents suggest reviewing Rule 35 of the CGST Rules, 2017, and ensuring proper reconciliation with contract documents. Opinions vary on whether the contractor's method is correct, with some advising verification of TDS calculations and contract payment details to resolve discrepancies.