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

Inclusive-price valuation under Rule 35 determines taxable turnover; reconcile contracts and TDS records to substantiate GST reporting.
Where contract receipts are inclusive of GST and the contractor bears the tax, Rule 35 prescribes decomposing the gross inclusive amount to determine taxable value and tax: tax = (value inclusive x tax rate) / (100 + tax rate). Taxpayers should report the net-of-tax turnover in GSTR 3B and pay GST on that computed taxable value, and must reconcile GSTR 7/TDS entries with contracts, work bills and payment records to substantiate the reported figures when challenged.