Is works contract eligible for composition scheme?
Composition scheme is available to works contractors from April 2019 provided turnover is up to Rs. 50 lakhs. Earlier, the composition scheme was not available to service providers and was open to only available to suppliers of goods.
Is works contract a composite supply?
Introduction: What is a works contract? Simply put, a works contract is essentially a contract of service which may also involve supply of goods in the execution of the contract. It is basically a composite supply of both services and goods, with the service element being dominant in the contract between parties.
Can input tax credit be availed on works contract service?
ITC shall not be available for any work contract services. ITC for the construction of an immovable property cannot be availed, except where the input service is used for further work contract services. They cannot claim any ITC on the works contract.
What is the GST rate for Works Contract?
GST Rate on Works Contract
| Canal, dam, water supply, sewage treatment | 18% |
|---|---|
| Oil exploration works contract. | 18% |
| Works contract awarded to the subcontractor by the main contractor, who provides the services mentioned above to the government. | 12% |
| A road, bridge, canal, or terminal for public use in road transportation. | 12% |
Does Labour charges attract GST?
Note: A works contract involves a composite supply of goods and services. Under service tax rules, the tax was paid at 15% to the extent of 40% of the total contract value….Comparison of after-tax labour charges.
| Particulars | Pre-GST | Post-GST |
|---|---|---|
| Total cost (material +labour) (A) | 100 | 100 |
| Excise at 12.5% (B) | 12.5 | — |
Does contract value include GST?
Bill are to be included in the taxable value of the supply by the contractor and GST should be charged on the total contract value. The applicable rate of tax is 18% (9% under Central tax and 9% State tax) for the services referred by the Applicant as per entry no.
Do you want to opt composition scheme?
To opt for composition scheme a taxpayer has to file GST CMP-02 with the government. This can be done online by logging into the GST Portal. This intimation should be given at the beginning of every Financial Year by a dealer wanting to opt for Composition Scheme.