Gst ?-construction contract which includes material&labour


Under the new GST what will be the applicable rate for individual house construction if we engage an contractor to construct. I understand the guidelines talk only about labour contract but not about building construction contract which includes material and labour.

Since contract company charge consolidated bill for house construction which includes material and labour, they are not ready to bifurcate the material cost and labour cost.

They are demanding to pay(GST) 18% of over all construction contract value. Its legal or ilegal ?

Please clarify me to come out of this issues.

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JaypeeGateway 5 years 1 Answer 391 views 0

Answer ( 1 )

  1. Yes Its legal,

    18% GST would be applicable on works contract services.

    12% GST applicable when Construction of a complex, building, civil structure or a part thereof, intended for sale to a buyer, wholly or partly (the value of land*** is deemed to be one-third of the total amount charged for such supplies).

    *** 12% GST rate applicable when value of land is part of total amount charged by supplier.

    And also you cannot claim ITC on works contract services charged for construction of immovable property etc.

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