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Gst on exempted service tax works contract, Goods and Services Tax - GST

Issue Id: - 113963
Dated: 17-7-2018
By:- Bijay Bharat
Gst on exempted service tax works contract

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Dear Sir/Madam,

Our company has went into a works contract agreement with state govt which mentions specifically that all taxes are included except service tax which will be reimbursed as per actual but now after GST coming into force when we had claimed the Cgst part as exemption or to be borne by client I.e state govt their is ambiguity and confusion kindly help out in this regard is their any law or way to claim the part to service tax which was rembursable .

Thank you

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Posts / Replies

Showing Replies 1 to 5 of 5 Records

1 Dated: 18-7-2018
By:- Alkesh Jani


In this regards, my point of view is that, In terms of Section 2(84) of CGST Act, 2017, even Central Government or State Government is a “Person” and GST is to be borne by the receiver of goods or services, therefore, State Government being recipient of service is liable for GST. The exemption Notification No.12/2017-CT (Rate) dated 28.06.2017, as amended from time to time, nowhere states "service provided to Government.....". Hence, exemption is not available.

Moreover, central and state Government dept. are Tax deductor at source (TDS) under Section 51 of CGST Act,2017, however, in terms of Notification No. 33/2017-CT dated 15.09.2017, the said Section 51 came into force with effect from 18th September-17.However, deduction of tax, shall be effected from date to be notified. This does not stipulates, from registration, But….

In view of above, it can be said that Government is liable to GST and should pay GST. Alternately, you can raise the Invoice including GST , supply to un-registered person and pay tax. Any other view is appreciated.


2 Dated: 18-7-2018
By:- YAGAY and SUN

In our view Government cannot deny to pay you the statutory dues/levies.

3 Dated: 18-7-2018


There are two important points in your query :-

Time of Supply and GST payable by State Government .

What is time of supply ?

GST will not applied, in case invoice raised or supply made ( whichever is earlier ) pre GST period . In that condition , service tax is reimbursable by State Government as per your work contract agreement .

In case supply made and invoice raised post GST , GST is payable by State Government at applicable rate .

4 Dated: 21-7-2018

State Government is to pay tax.

5 Dated: 24-7-2018
By:- Himansu Sekhar

The ITC of the inputs, input services will be available to you. Government may think of reducing the Tax in that respect.


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