Notification 11/2017-CTR as amended by Notification 20/2017- CTR dated 22-08-2017, NN 24/2017-CTR dated 21-09-2017 and further proposed to be amended by GST Council meeting recommendations dated 06-10-2017 and is covered by heading 9954
Sl. No.3
| (i) | Construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier. (Provisions of paragraph 2 of this notification shall apply for valuation of this service) is taxable @ 18%
In case of supply of service specified in column (3) of the entry at item (i) against serial no. 3 of the Table above, involving transfer of property in land or undivided share of land, as the case may be, Ø the value of supply of service and goods portion in such supply shall be equivalent to the total amount charged for such supply less the value of land or undivided share of land, as the case may be, Ø and the value of land or undivided share of land, as the case may be, in such supply shall be deemed to be one third of the total amount charged for such supply.
Explanation .– For the purposes of paragraph 2, “total amount” means the sum total of,- (a) consideration charged for aforesaid service; and (b) amount charged for transfer of land or undivided share of land, as the case may be
Hence effective tax rate shall be 12% in case of construction of complex service. |
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| (ii) | composite supply of works contract as defined in clause 119 of section 2 of Central Goods and Services Tax Act, 2017.is taxable @ 18%
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| (iii) | Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied to the Government, a local authority or a Governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of, – [Note: Building,fabrication , Modification, Improvement is not covered]
(a) a historical monument, archaeological site or remains of national importance, archaeological excavation, or antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958);
(b) canal, dam or other irrigation works;
(c) pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage treatment or disposal.
Is taxable @ 12% w.e.f. 22/08/2017. (From 01/07/2017 to 21/08/2017 It is taxable @ 18%)
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| (iv) | Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of,-
(a) a road, bridge, tunnel, or terminal for road transportation for use by general public;
(a) a civil structure or any other original works pertaining to a scheme under Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaas Yojana;
(c) a civil structure or any other original works pertaining to the “In-situ rehabilitation of existing slum dwellers using land as a resource through private participation” under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana, only for existing slum dwellers;
(d) a civil structure or any other original works pertaining to the “Beneficiary led individual house construction / enhancement” under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana;
(e) a pollution control or effluent treatment plant, except located as a part of a factory; or
(f) a structure meant for funeral, burial or cremation of deceased.
Is taxable @ 12% w.e.f. 22/08/2017 (from 01-07-2017 to 21/08/2017. It is taxable @ 18%).
Note: 1. It is similar to Sl No, 13 of 25/2012 2. However Sl No, 13 of 25/2012 provided exemption for services by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a building owned by an entity registered under section 12 AA of the Income tax Act, 1961(43 of 1961) and meant predominantly for religious use by general public For which concessional tax is not available and hence shall be taxed at 18%. |
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| (v) | Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied by way of construction, erection, commissioning, or installation of original works pertaining to,- [Note : Repair, Alteration. Modification, Renovation, Completion, fitting out not covered by Concessional taxation]
(a) railways, excluding monorail and metro; [Note : Cosntruction service for Air port, port, monorail and metro shall be @ 18%]
(b) a single residential unit otherwise than as a part of a residential complex;
[Para 2 (zzb) “residential complex” means any complex comprising of a building or buildings, having more than one single residential unit;
[Note: 1. Construction for Residential Complex is taxable @ 18%. 2. 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 is exempt as per Sl. No. No. 11 of Exemption Notification 12/2017]
(c) low-cost houses up to a carpet area of 60 square metres per house in a housing project approved by competent authority empowered under the ‘Scheme of Affordable Housing in Partnership’ framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India;
(d) low cost houses up to a carpet area of 60 square metres per house in a housing project approved by the competent authority under-
(1) the “Affordable Housing in Partnership” component of the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana;
(2) any housing scheme of a State Government
(e) post-harvest storage infrastructure for agricultural produce including a cold storage for such purposes; or
(f) mechanised food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages.
Is taxable @ 12% w.e.f. 22/08/2017 (from 01-07-2017 to 21/08/2017. It is taxable @ 18%)
Note: As per item no. 10 of Exemption Notification 12/2017 , Services provided by way of pure labour contracts of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works pertaining to the beneficiary-led individual house construction or enhancement under the Housing for All (Urban) Mission or Pradhan Mantri Awas Yojana is exempt
Note : 1. Para 2(zs) of 12/2017 “original works” means- all new constructions; (i) all types of additions and alterations to abandoned or damaged structures on land that are required to make them workable;
(ii) erection, commissioning or installation of plant, machinery or equipment or structures, whether pre-fabricated or otherwise;
2. Hence Pure labor contracts of following nature for erection, commission or installation in single residential unit should be exempt: a) Air Conditioning b) Security Systems c) Electrical Installations d) Sanitary Installation |
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| (vi) |
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| (vii) | Construction services other than (i), (ii), (iii), (iv), (v) and (vi) above is taxable @ 18%
Note : Construction Services shall cover pure labor service also |
Further as per GST Council decision dated 06-10-2017
| 1 | Works contract services involving predominantly earth works (that is, constituting more than 75% of the value of the works contract) supplied to Central Government, State Governments, Local Authority, Governmental Authority or Government Entity shall be taxed at 5%. |
| 2 | Present definition of “governmental authority” has the same meaning as assigned to it in the Explanation to clause (16) of section 2 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017
As per Explanation to Section 2(16) of IGST Act: Explanation.––For the purposes of this clause, the expression “governmental authority” means an authority or a board or any other body,– (i) set up by an Act of Parliament or a State Legislature; or (ii) established by any Government
Definition of Governmental Authority expanded also to include any authority set up to carry out any functions entrusted to a Panchayat under Article 243G of the Constitution. |
| 3 | Supply of service or goods by a Government Entity to Central Government, State Government, Union Territory, Local Authority or any person specified by them against consideration received from them in the form of grants, shall be exempted.
“Government Entity” shall be defined as an authority or a board or any other body including a society, trust, corporation which is, – (i) set up by an Act of Parliament or State Legislature, or (ii) established by any government,
with 90% or more participation by way of equity or control, to carry out a function entrusted by the Central Government, State Government or a local authority |
| 4 | The reduced rate of 12% on specified works contract services supplied to the Central Government, State Government, Union Territory, Local Authority and Governmental Authority shall be extended to a Government Entity, where such specified works contract services have been procured by the government entity in relation to the work entrusted to it by the Central Government, State Government, Union Territory or Local Authority |
| 5 | GST shall be levied @ 12% on works contract services in respect of offshore works contract relating to oil and gas exploration and production (E&P) in the offshore area beyond 12 nautical miles |
| 6 | Exemption to annuity paid by NHAI (and State authorities or State owned development corporations for construction of roads) to concessionaires for construction of public roads. |