Page 63 - CA Final GST

Badlani Classes

Painting of a building, repair of a Yes, if such contracts involved provision of
building, renovation of a building, materials as well.
wall tiling, flooring.

Valuation: In case of construction services where price is inclusive of land, then, a
rd
deduction of 1/3 is allowed. In case of works contract, only service portion is considered.
Normally, Rate of GST is 18%.

Entry 10 EXEMPTION RELATING TO WORKS CONTRACT/CONSTRUCTION
/11 SERVICE
The following are exempt from GSTP
1- Pure labour under Housing for All (Urban)Mission or Pradhan Mantri Awas
Yojana (Entry 10]: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

“Original works” means [Para 2(zs)]:
(i) all new constructions;
(ii) all types of additions and alterations to abandoned or damaged structures on land
that are required to make them workable.
(iii) erection, commissioning or installation of plant, machinery or equipment or
structures, whether pre-fabricated or otherwise;
2- Pure labour for single residential house [Entry 11]: 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.

“Residential complex” means any complex comprising of a building or buildings,
having more than one single residential unit;

“Single residential unit” means a self-contained residential unit which is designed
for use, wholly or principally, for residential purposes for one family;

Analysis: Thus, construction of single residential unit is exempt; while that of
residential complex is liable to GST .Exemption is allowed only if labour is provided.
If composite contract of material and labour [is taken, there is no exemption].

Two-floor house constructed through a contractor- Exempt only if single unit:
If each of the floors of house is a single residential unit in terms of the definition,
GST is leviable. If the title of each of floors is capable of being transferred to another
person by mutation in land/municipal records, both the floors may be considered as
separate single residential units.
Que. Construction Services to landowner-Value & Time of Supply: Y Ltd. has constructed
a residential complex on land of Mr. Ram Pyare after obtaining land development rights
from Mr. Ram Pyare. The land development rights were granted on 1-7-2018, while
construction services were provided during July 2018 to March, 2019. The completion Page62
certificate for flats was issued on 31-3-2019. Out of 40 flats constructed thereon, 15 have

Central Goods & Services Tax Act, 2017