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What will be the GST Rate on Government Contracts Awarded before 18.07.2022 when GST Rate increased from 12% to 18%

Government contractors are facing teething issue with regards to GST rate on the Government Contracts which were awarded before 18.07.2022 but work is completed after 18.07.2022 when GST Rate was increased from 12% to 18%.


Actually, Contractor are at loss if GST rate 18% is applicable on such contracts as while submitting tenders for such work they would have considered GST rate of 12% while quoting Price (Where Price was inclusive of GST).


Summary of Notification (Taken from Authority Ruling):

List of Work Contract

Old GST Rate

New GST Rate

Effective Date

Work Contract for Road, Bridge, Railway, 12% Metro etc and work contract supply to Central Govt., State Govt. and Local Authority for historical monuments, canals, Dams, Pipelines, Plant for water supply etc.

12%

18%

18th July, 2022 (in terms of N.No. 03/2022)

Therefore, M/s PPS Builder Private Limited sought advance ruling on the matter from Jaipur Authority for Advance Ruling. (Copy of Decision is provided at the end of the Article).


Authority decided that since work contract service is a continuous Service, Rate of GST needs to be determined in terms of Section-14.


For Complete details about Section-14 along with illustrations, please read at : Details of Section-14


Considering the Provisions of Section-14, Authority decided that:



Copy of the Order


PPS BUILDERS PVT LTD L, AAR ORDER NO-33 DATED 11-09-2023
.pdf
Download PDF • 5.05MB

Disclaimer:  We did interpretation of Respected Authority Decision for purely academic purpose. In case, there is any mistake in understanding of the order, we are apologised to the Authority.



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