RATE OF GST FOR SUB CONTRACT OF GOVERNMENT CONTRACT ALLOTED TO CONTRACTOR, Goods and Services Tax - GST

A contract work of the government is allotted to a contractor, for which the rate of GST is 12%. The contractor has subcontracted the work to the subcontractor.

What is the rate of tax for contract work done by the sub-contractor whether 18% or 12%?

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1 Dated: 18-12-2021 By:- KASTURI SETHI

Service by sub-contractor to contractor is not supply of service to Govt. Sub-contractor will pay GST @18%. Contractor can take ITC. So it is revenue neutral.However, in the case of construction of affordable apartments, GST Rate is 12%.See FAQs issued vide circular no.354/32/2019-TRU dated 7.5.19.

You may study circulars and notifications issued during last two months, if there is any change.

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2 Dated: 18-12-2021 By:- KASTURI SETHI

Also read Notification No.1/18-CT(R) dated 25.1.18 amending notification No.11/17-CT (R) dated 28.6.17. Serial No.3(ix) refers. This amended notification allows concessional rate of 12% to sub-contractor with conditions.

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3 Dated: 20-12-2021 By:- Shilpi Jain

There are only certain works in respect of which the concessional rate is made applicable to the sub contractor as well.

Refer rate entry S. No. 3(ix) and 3(x).

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4 Dated: 20-12-2021 By:- Shilpi Jain

Also if you are referring to govt. works, i hope it is works for CG, SG and not relating to Govt. entity or Govt. authority. For services provided to these, the rate of tax is amended from 1.1.2022

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