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WORKS CONTRACT, Goods and Services Tax - GST

Issue Id: - 117113
Dated: 22-3-2021
By:- RV PERUMAL
WORKS CONTRACT

  • Contents

A PRIVATE LTD COMPANY'S DIRECTOR CONSTRUCTED HIS RESIDENCE HOUSE. THE LAND, PLAN APPROVAL AND EVERY THING IN THE NAME OF HIM. BUT THE CONTRACTOR'S PAYMENT IS MADE BY COMPANY. HENCE, GST DEPARTMENT ASKED TO PAY GST @ 18% INSTEAD OF 12%. WHETHER IS IT CORRECT OR NOT. PLEASE GUIDE

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Showing Replies 1 to 4 of 4 Records

1 Dated: 22-3-2021
By:- KASTURI SETHI

In this scenario, a person who makes payment for service is de facto service receiver. Hence the department's stand is correct. There are other factors who is liable to pay tax but here the company is in the forefront.


2 Dated: 22-3-2021
By:- RV PERUMAL

THANK YOU VERY MUCH SIR. HERE, THE PAYMENT MADE BY THE COMPANY ON BEHALF OF THE DIRECTOR AND NOT REFLECTED IN THE COMPANY'S BOOK AS A BUILDING OR SOME OTHERS. THE COMPANY ACCOUNTED THE PAYMENT AS A LOAN TO DIRECTOR OR DIRECTOR'S CURRENT ACCOUNT. NOW, WHAT'S THE TAX RATE


3 Dated: 22-3-2021
By:- KASTURI SETHI

Sh.R.V. Perumal Ji,

With reference to your above query at serial no.2 dated 22.3.21, you have not disclosed full facts at the first instance. The following facts are in favour of the company :-

(i) Payment made for and on behalf of Director

(ii) Not accounting for the payments in the company's account as receivrer of construction service.

(iii) Loan

Suppose A intends to make payment on behalf of B , B can do so. There is no such restriction in CGST Act. Liability rests with B.

Regarding rate of tax in this scenario, pl. go through serial no.11 of Notification No.12/17-CT(R) dated 28.6.17 as amended up to 16.10.20

 


4 Dated: 22-3-2021
By:- ABHISHEK TRIPATHI

As KS Sir stated - Notification

S No. 11- Heading 9954 - Services by way of pure labour contracts of construction, erection, commissioning, or installation of original works pertaining to a single residential unit otherwise than as a part of a residential complex. - Nil- Nil


1

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