GST Circulars

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qErffi -rr6-trfuq, srst
National Rural lnfrastr
f(
ent ncy
g
Ministry of Rural t, Govern of lndia
ji Cama P , New Delhi-110066
t\" N BCC Tower, 5'h

\ Dated : 06.06.201 8

iy of Nodal Departments of PMGSY (State/UT), Empowered


6ers of SRRDAs, General Managers Finance (NEAs)' (All State)
.?fim
€@t
and Service tax- Works Contract

rnment of lndia has enacted the Ooods and Services Acl2017 throughout lndia
i.t.Al.ZOtl. The GST has subsumed various indirectTaxes of both the Central & State
nment, such as Central Excise Duty, Service Tax, Central Sales Tax (CSTI Worl<s
ract Tax (WCT)/ State Value Added Tax (VAT), Additional Custom Duty (CVD) and special
ditional Duty (SAD) apart from Entry Tax and Octroi Charges etc'
rhp qri..l-:t!.C Bi.rd!n!. f-)scr-rn]ent irsBD) rnakes prc,.,!sicns a!:er-rt lhe laver .''"'hich ri!r'ecily
qty related to Contract Value, it incorporates that whenever the tax structure is changed during
the ongoing contract and new law comes into force then the contractor has to be refunded
the increased amount of taxes, if any ancl similarly, recovery is to be made from the
contractor if the taxes have decreased.
3. On request of various States, seeking clarifications of GST and issuance of guidelines for
(lFD) of
- future references, tiris office in consultation with Integrated Flnance Division guidelines
rr\h[ fli\b rvlrnistry of Rural Development (MoRD) has worked out comprehensive and
- JUt* "- c.rtegor-ized of A, B, and D to
?5 all the projects under PMGSY into four different categories C

t \a> ."'cnable the States to calculate additional tax burden'


.4.
;>\
s\a> r-ne adoption and the consequent implication of GST under PMGSY will be on the
""--,-+...
,r..j .'"'';."'-1,,.'":
?-:!:'l^llowins
t ),.,'tot owi n g catepories r ks -
works
catego ri e s of wo

J Works sanctioned, prior to ALA7.2017, under different phases of PMGSY and which
are ongoing i.e. subsisting contracts( including the delayed projects, beyond the
w original intended completion date) under various stages of physical and financiai
progress -(CategorY A)

Works sanctioned, afler 0L.O7 .2017, under different phases of PMGSY wherein GST
has not been accounted for in the original proposal/sanction and wherein Tenders
have been completed-(CategorY B)

Works sanctioned after 01.07.2017, under different phases of PMGSY wherein GST
has not been accounted for in the original proposal/Sanction and for which tender
process has not been lnitiateci - (Category C).

All new works proposed and yet to be proposed i.e. works which are in the pipeline
under PMGSY - (CategorY D).

5. Following are the Guidelines suggested to be followed by all SRRDAS -


A. Category A

i. The new Goods and Services Tax (GST) laws require that all invoices should show the value
Js\ of supply and GST separately, and the value of supply will therefore, includp non-GST taxes,
Pl,tttr which remain embedded in the input prices, such as taxes on petroleum products.

1
ii. The Project components under different major heads (like Earth, Sand, Aggregates, Steel,
Bitumen etc.) are to be intimated by the Contractor, clrecked and confirmed by the
competent authority.
ilt. The major issue under GST regime is to identify the portion'of the existing contract that will
come under GST. Therefore, there is a need to cull out GST con'lponerlt of the existing
contracts (i.e. the value of taxes subsumed under GST).
iv. The benchmark date for this purpose will be A1".A7.7017 i.e, GST will be applicable on the
portions of the contracts that are being paid from A7.07.2017,
The value of the portion of the work not completed or not paid for as on 0'J-.A7.2077 shall be
divided into two components.

a. Value of work includingtaxes and duties such as Customs Duty, taxes on petroleum pro'ducts
$,
and other non-VAT taxes that have not been subsurhed into GST should be worked out.
The balance will be the value of taxes subsumed into GST such as Central Excise Duty and
VAT i.e. GST component.

vi. Therefore, the value of subsumed taxes under GST needs to be separated out from the
contracted amount to arrive at the value of work.
vil. The key issue is to estimate the value of subsumed tax carefutly and as accurately as
possible. For this purpose, an indicative Excel format is annexed lor guidance.
Model calculations are also attached herewith and states may workout similarly for all the
@.
irT_f taxesincluding ED, CST, VAT/WCT and other taxes which were already in the contract
'
price as per the original contract. The same format can be used to compile the information
for each ongoing project, taking into consideration the GST input tax credit available for the
project. The assessment of subsumed shall be submitted by the contractor along with
copies of invoices and statement of input taxes duly certified by a Chartered Accountant. lt is
responsibiiity of the contractor to furnish correct details of the subsumed taxes.
Once the value of work sanction and GST taxes e employer may ent-er into
zuFpteffi entaiagreEment ry
thE-value of subsumed tax . arrived as above plus GST of 1.2%. i.e,, the cost of the
qequc
ffid"r"d i, tt "tim ll" It required to be he
"
o-ngiflefcTnfrTif-price to arrive at the actual amount of "cost of the proiect".
ix. (VAT etcl to be carried
forward under their Transitional Provisions. Therefore, Section 140 of the GST law in effect
allow credit of all subsumed taxes paid by a taxable person on his inputs, including the
Central Excise Duty embedded in the price of inputs.
Thus, the supplier gets ITC into the GST credit ledger through Transitional Provisions
fincluding both theVAT anci Cenirai ixeise Duty pairl- on the inpr,tsi.
xi. The contractor while raising their bill and tax invoice post-GST, will now collect GST as
indicated above from the employer and will remit the same to the respective Government.
The entire GST of the supply will have to be finally borne by the employer'
xii. The contractor will have to pay GST on the value of work, which he will pay to the respective
Government, partly using the ITC that represents the taxes that he has already paid through
the inputs, and partly using cash coliected from the procuring entity concerned.
xiii. Through this arrangement, the supplier also cannot claim to have incurred loss on account of
embedded taxes that has been paid on the inputs.

B. ategory B '

The works sanctioned after 01.07.2017, may be treated upon status of their work, as here
under:

For works, which have been awarded and commenced on the field, action may be initiated
as detailed in the uaiegory A above.
b. Ftrr works, which have been awarded but not commenced may also be treated as above
before commencement of the work.

ii. ln cases, wlrere tenders are initiated as per the existing SBD (Standard Bidding Document)
norms, there should be no change in the evaluation criteria for selection of the bidders and
bids shall be evaluated based on the criteria mentioned in the tender documents. However,
after identification of the lowest bidder, it must be ensured that, all taxes subsumed under
GST are carefully deducted to arrive at the value of works under the GST law, and the
agreements should provide for payment of value of works plus applicable GST.

C. CategoryC

i. ln cases, where the sanctions have been obtained after 01.07 ,2017 and tenders are yet to be
initiated, the rates to be quoted shall be exclusive of GST and GST of 1,2% will be added to
the value offered by the bidder separately.
ii. The SBD may be modified to the above extent.
il1. The Bill of Quantities (BoQ shall also reflect prices offered by the bidder without GST and
applicable GST separatelv.
iv. The states shall work out the departmental cost of the work without GST for the purpose of
evaluation and comparison witJi rates offered by the bidders.

D. Category D

i. ln cases of all new works to be proposed under PMGSY, the states shall prepare Schedule of
Rate (SoR) after deducting the taxes subsumed under GST.
ii. The Detailed Project Reports shall be prepared based on this revised SoR and the state may
add 1,2% GST to cost of the work to arrive at the overall cost of the work.
iii. ln allsuch cases approval of SoR may be obtained from NRRDA as per existing practice.

6. Revision of Cost

The states shall work out the impact of GST for all the works individually for all category of

Excess tlat m;|Te


ih-arruja-tGTn ofFMG
7. Thesejns-Iiud- proposals have been made with
necessary 65T component for which no revision of cost is required or permitted.
8. This has concurrence of lFD, MoRD vide diary dated 28.05.2018. w

Copy to :

1. JS (RC) & DG, NRIDA, Krishi Bhawan, New Delhi


2. All Financial Controllers of Nodal Departments of pMGSy
3, Director (Tech.)/ Director (p-ilt)/Director (p-1, p-il) NRTDA
4. Dy, Secretary (RC Division) MoRD, Krishl Bhavan, New Delhi
5. Dy. Secretary (lFD), MoRD, Krishi Bhavan, New Delhi.

,,A{*{'".'
l'lationaI wa' & lnfrastructure Devel ent Iimited

Contract details Contracts)

iName of tlt.r Contractor/


'!) na re 1

GST I'lo.

Gross 0riginai \.1alue of the Vatue of SeMces lPayments ctaimed upto lO.O.ZOti- Payments ctaimed upto Bal. payments to Batance
Contract rendered upto I originat contract price 30.6.201 7-Price be made after Services to
Variation 01.O7 .7017 lot
be rendered-
seryices rendered
originat
upto 30.06.2017.
contract
(c+b,d-e)
Price

Gross Original Value


of the ContractTotal

Cost ot thc project I t ooid-


--soao
age Rate of Tax under Pre-GST

I Thc 69[15 rr 6reen are for rnpJt


Vatue of the work done by tire
2 The correct rate of taxes for Excjse,CST,VAT are to be entered.

3 The rates for VAT/Output VAT are as may be appticabte for respective
Adjusted Vatue of Work done states
4 The issue of ctosing stocks are not consjdered due to complexitjes invotved
Add GST (on value ot wort<
done * Margin)
5 The Components & Taxes are indicative. lt has to be project specific
and may change

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GOVERNMENT OF ODISHA
FINANCE DEPARTMENT
*****
Memo No. _________36116______ /F, D. 07.12.2017
FIN-CT1-TAX-0045-2017
To
All Departments of Government,
All Heads of Department.

Sub: Guidelines regarding Works Contract under GST.

The Goods and Services Tax (GST) has come into force w.e.f. 1st July, 2017. Works
Contract is treated as composite supply of service under GST. The GST rate for composite supply
of Works Contract to the Government, local authority or Government authority is reduced from
18% to 12% (CGST 6% and SGST 6%) vide Finance Department notification No.24672 dated
22.8.2017 and 27987 dated 21.9.2017. Further, the GST rate for composite supply of Works
Contract involving predominantly earthwork (that is, constituting more than 75% of the value of
the Works Contract) provided to the Central Government, State Government, Union Territory,
local authority, a Governmental authority or a Government entity has been reduced to 5% (CGST
2.5% and SGST 2.5%) vide Finance Department notification No.29779 dated 13.10.2017.
However, different Departments have raised different issues regarding Works Contracts awarded
in pre-GST regime and GST regime. After careful consideration of the issues, the Government
have been pleased to issue the following clarifications :

1. Works Contracts executed before 01.07.2017 and payments made in pre-GST period
and GST period.

(i) In the pre-GST regime, taxes like Central Excise Duty, Entry Tax, OVAT and
Service Tax have been included in the estimated value of the Works Contract and
form a part of the bid price as well as of the contract price. Accordingly, the value
of the contract was inclusive of all taxes.
(ii) In case of Running bills, submitted before 1st July, 2017, the provision of VAT and
Service Tax were applicable.
(iii) The Running bills/Final bills submitted after 1st July, 2017 for the works executed
in the GST regime, the tax invoice is to be issued by the contractor showing CGST
and SGST as applicable separately within the contract value of the works.
(iv) In case, TDS amount has been deducted before 01.07.2017, but not yet deposited
in State Government exchequer under the Head of Account – 0040 through
challan, the same may be deposited immediately.

Page 311
2. Works Contract executed after 01.07.2017 but tender invited before 01.07.2017

(i) In case, the tender for works contract was invited before 01.07.2017, but
agreement to be executed after 30.06.2017, the tender may be awarded to the L-1
bidder with the stipulation that the quoted price is inclusive of GST as applicable
and appropriate GST will be shown separately in the invoice within the contract
price. If the L-1 bidder does not agree with the aforesaid arrangements, the tender
invited may be cancelled.
(ii) For work contract executed in the GST period, provisions of GST Acts are
applicable.
(iii) The TDS provisions under the GST Act (i.e. Section 51 of OGST Act/CGST Act)
have not yet come into effect. Therefore, no TDS deduction is to be made under
GST Acts against payments released or to be released to the executants after
01.07.2017 until further communication.
(iv) As per the GST Acts, the executant is bound to issue GST invoice for receiving
payment. Therefore, once the measurement of the work is completed
(running/final measurement) and the gross amount payable to the executant is
determined by the engineer-in-charge of the work, the executant shall issue GST
Invoice showing CGST and SGST separately within the contract price.
(v) The executant, on receipt of payment, has to discharge his tax liability under the
GST Acts accordingly.
3. Preparation of estimate for new works after 01.07.2017

(i) The estimate of the work is to be prepared on the basis of revised Schedule of Rate
– 2014 issued by Works Department vide their OM No.13827/W dated 16.09.2017
. In case, goods and services required for the execution of works contract are not
covered in the revised Schedule of Rate issued by Works Department, the
Administrative Department may prepare the same deducting Central Excise Duty,
Entry Tax, OVAT and Service Tax as applicable before 01.07.2017 in consultation
with Finance Department.
(ii) The GST as applicable will be added with the estimated cost of the work
separately.

In case of any further clarification in the matter, the Administrative Department may refer
the proposal to Finance Department.

Sd/-
Principal Secretary to Government

Page 312
GOVERNMENT OF WEST BENGAL
Finance Department
Audit Branch

No. SOSO-F(Y) Dated 16.08.2017


NOTIFICATION

Subject: Clarification/Guidelines regarding issues pertaining to Contracts awarded by


the State Government Departments/local authorities/statutory bodies/
PSUs under Government of West Bengal due to the introduction of GST i.e.
1st July 2017.

With the introduction of GST, different Departments have sought clarifications on


modalities of treatment of pending bills of different contracts in the pre-GST regime.
Departments have also sought clarifications with regard to projects which have been
approved prior/post to the introduction of GSTon 1st July 2017.

2. Now, the following guidelines have to be followed by the Departments/local


authorities/statutory bodies/PSUs under Government of West Bengal with respect to
treatment of work contracts and supplies in the pre-GST and post-GST regime for:
1. Pre-GSTcontracts for supply of goods;
2. Pre-GSTcontracts for supply services;
3. Pre-GSTworks contracts;
4. Post-GSTcontracts for supply of goods or services or both.

3. Pre-GST contracts:

i. With regard to supply of only goods the following procedure is to be followed:

SI. Situation Mode of Treatment


a. Goods supplied before 1st July 2017 While making payment to the supplier
and invoice/bill also raised before on or after 1st July 2017:
st
1 July 2017, but payment is made •
VAT will be applicable and not GST
on or after i'' July 2017 •No TCS under WBVAT Act, 2003 is to
be deducted
b. Goods supplied before 1st July WBGST and CGST rates will be
2017 and invoice/bill raised on or applicable.
after 1st July 2017
c. Goods supplied on or after 1st July WBGST and CGST rates will be
2017 and invoice/bill raised on or applicable.
after 1st July 2017

1
~ ii. With regard to supply of only services (eg: Consultancy, Security Services, Cleaning,
etc ) the following procedure is to be followed'
Situation Mode of Treatment
SI.

a. Services supplied before 1st July 2017 Service Tax is applicable.


and invoice/bill also raised before 1st
July 2017, but payment is made on or
after IstJuly 2017
b. Services supplied before 1st July 2017 Service Tax is not applicable.
and invoice/bill raised on or after 1st
July 2017 within 30 days from supply of
service
c. Services supplied before 1st July 2017 Service Tax is applicable ..
and invoice/bill raised on or after 1st
July 2017 after expiry of 30 days from
supply of service
d. Services supplied on or after 1st July WBGST and CGST rates will be
2017 and invoice/bill raised on or after applicable.
1st July 2017

iii. With regard to works contracts (eg: roads, buildings, etc.) where the supply is of
both goods and services:
SI. Situation Mode of Treatment

a. Works Contracts executed and VAT is applicable.


completed before 1st July 2017 and Service Tax is applicable.
invoice/bill also raised before 1st July
2017, but payment is made on or after
1stJuly 2017
b. Works Contracts executed and VAT is applicable.
completed before 1st July 2017 and
Service Tax is not applicable.
invoice/bill raised on or after 1st July
2017 by the contractor within 30 days
after completing such contract
c. Works Contracts executed and VAT is applicable.
completed before 1st July 2017 and
Service Tax is applicable.
invoice/bill raised on or after 1st July
2017 by the contractor after expiry of
30 days after completing such contract
d. Works Contracts executed on or after WBGST and CGST rates will be
1st July 2017 and invoice/bill raised on applicable.
or after 1st July 2017

2
~ iv. When invoices/bills are to be raised by the contractor/supplier, the value of the bill
together with the applicable tax under GST (i.e. WBSGST + CGST in case of local
purchase from within the State) should not exceed the value that such
st
contractor/supplier would have billed for prior to 1 July, 2017 inclusive of VAT and
Service Tax, if any.

For instance, say, as per pre-GST contract agreement (which was inclusive of VAT
and service tax, if any) the value of the project is Rs.100000/-, the bill/RA bill under
GSTwill arrive at the taxable value in accordance with the formula below:

Taxable (Value inclusive of taxes) X 100 / (100+ sum of CGST & SGSTtax
value = rates)

So here, the project value (excluding tax), with, lets say, a GST rate of 6% CGSTand
6% SGST,will be = 100000 X 100/112= 89285.70/-

Thus the bill will be raised as follows:

Rs.
Project value (excluding tax) 89285.70
Add: CGST@ 6% 5357.15
Add: SGST@ 6% 5357.15
Total 100000.00

It is clarified that under no circumstances will there be a revision of any contractual


values in the contract due to impact of change in tax rate(s), if any, from
VAT/Service Tax to GST.

4. Post-GST contracts:

i. With regard to post-GST contracts or ongoing projects where estimates have been
approved before 1st July 2017 i.e. those work orders given/to be given for supply of
goods or services or both (works contracts), GST rates will be applicable. In other
words, the supplier of goods/services/both has to pay WBGST and CGST on all
taxable goods/services.

ii. Under the West Bengal Value Added Tax Act 2003, "works contract" covered both
moveable and immoveable property, whereas, "works contract" under GST is
restricted only to immovable property.

3
In GST, works involving supply of taxable goods along with labour to any
moveable property(e.g. servicing of motor vehicle with motor parts, AMC contract
for computers or AC machines or generator, repair of furniture, etc) has been
referred to as "composite supply" as the supply of goods and labour are naturally
bundled and made in conjunction with each other. The rate of tax for a "cornposite
supply" will be that of the principal supply. In other words, the pre-dominant nature
of the contract will be the deciding factor. The principal supply can either be of
service or goods. For instance, in the case of servicing of motor vehicles or AMC
contracts the principal supply is service and the rate of tax on service shall be
applicable. On the other hand, where a contract is for supply-cum-installation of AC
machine, then here the principal supply will be AC machine and the rate of tax of the
AC machine will be applicable.

iii. No TDS under GSTis to be deducted till Section 51 (i.e. the Section relating to TDS) of
the WBGST/CGSTAct is notified and made operative.

5. Difficulty, if any, in the implementation of the above instructions may be brought to


the notice of the Finance Department.

sd/-
(H.K. Dwivedi, IAS)
Principal Secretary to the
Government of West Bengal

No. SOSO/l(SOO)-F(Y) Dated 16.08.2017

Copy forwarded for information and necessary action to:

1. Principal Accountant General (A&E), West Bengal, Treasury Buildings, 2,


Government Place West, Kolkata - 700001.
2. Principal Accountant General (Audit), West Bengal, Treasury Buildings, 2,
Government Place West, Kolkata - 700001.
3. Accountant General (Receipt Works & Local Bodies Audit), West Bengal, CGO
rd
Complex, 3 MSO Building, s" Floor, Block OF,Sector I, Salt Lake, Kol ., 700064.
4. Additional Chief Secretary/Principal Secretary/ Secretary, _
Department.
He is requested to forward this to all Local Bodies/Statutory Bodies/PSUs and
other parastatals under the administrative control of his Department.
5. Special Secretary/Additional Secretary/Commissioner / Joint Secretary/Deputy
Secretary, Finance Department.
6. _______________________ Department.
7. Commissioner, Division, _

4
" 8. Director, _

9. Director of Treasuries & Accounts, West Bengal, Mitra Building, 8, Lyons Range,
3rd Floor, Kolkata - 700001.
10.District Magistrate / District Judge / Superintendent of Police, _

l1.Sub-Divisional Officer, _
12.Block Development Officer, _
13.Pay & Accounts Officer, Kolkata Pay & Accounts Office-l, 81/2/2, Phears lane,
Kolkata -700012.
14.Pay & Accounts Officer, Kolkata Pay & Accounts Office-II, P-l, Hyde lane, Kolkata
-700073.
IS.Pay & Accounts Officer, Kolkata Pay & Accounts Office-Ill, IB Market, 1st Floor,
Block IB, Sector Ill, Salt Lake, Kolkata - 700106.
16.Treasury Officer, _

17.Group __ / Branch, Finance Department.


18.Sr. PSto Chief Secretary, Government of West Bengal.
19.5ri Sumit Mitra, Network Administrator, Finance (Budget) Department. He is
requested to upload copy of this order in the website of Finance Department.

5
CERTIFICATION WORK BY A PRACTICING CMA
ON IMPACT OF GST ON EXISTING WORKS
CONTRACTS IN RAILWAYS

CMA SHIBA PRASAD PADHI


Practicing Cost Accountant

I ndian Railway is considered to be the back bone of Indian economic system and it is the lifeline for many commuters and
business man. Transportation of passengers and transportation of goods are the two principal outward supply of services
that Railway is engaged with. There are 17 distinct Railways which operate under the administrative control of Railway Board
and each of the Railways have multiple Divisions, Carriage Repairing Work Shops (Diesel Locomotive Works) and a Head Quarter
which has engaged GST Consultants to guide the Railways in the matter of GST as Railway Board has instructed in many of their
Communications to engage GST Consultants at each of their Office.

Details of the 17 Railways are as under:


1. Central Railway
2. East Central Railway
3. East Coast Railway
4. Eastern Railway
5. Metro Railway Kolkata
6. North Central Railway
7. North Eastern Railway
8. North Western Railway
9. North East Frontier Railway
10. Northern Railway
11. South Central Railway
12. South East Central Railway
13. South Eastern Railway
14. South Western Railway
15. Southern Railway
16. West Central Railway
17. Western Railway

Railways apart from Railway Electrification Divisions, Railway Construction Divisions and Wagon Manufacturing Units (Rail
Coach Factory) usually outsource many of their services and award hundreds of contracts at each Division and Office. Contracts
in Railways are awarded for Supply of Goods or under Works Contract every year. Usually Works Contracts are awarded on all
inclusive basis and payment of all taxes and duties is the responsibility of the Contractor. After implementation of GST, Railway
Board advised all Railways to make an impact analysis of GST on the Works Contracts which were awarded before 01.07.2017
(administered date for GST) but execution/payment of which is pending in part or full after this date. Each of the Railway issued
an extensive guideline (Joint Procedure Order) for making such impact analysis and tax neutralisation thereof. In a recent
Circular bearing No. 2017/CE-I/CT/7/GST, dated 16.04.2017, Railway Board has considered Practicing Cost Accountants to
certify the Work Sheet of tax liability before GST and after GST. A Contractor can engage a Practicing Cost Accountant for such
tax impact analysis and certification which is required to make a supplementary agreement based on which payments will be
released to the Contractor.

How to make such Impact Analysis?

An in-depth study of the Contract Agreement awarded to the Contractor along with Supplementary Agreements or Revised
Agreements, if any needs to be studied by the CMA to understand the type of work, period covered, cost elements in respect to
manpower, material, machines and tax components etc. under each Schedule. Payments made upto 30.06.2017 can be
ascertained from the last Bill cleared by the Railway or considering period of completion if the pricing is firm and can be
ascertained in terms of period left.

All the taxes and duties which the Contractor was liable to pay during the pre-GST regime like Excise Duty on material and
equipment, CST/VAT on material which was levied at different stages in the value chain, VAT on Works Contract, Entry Tax,
Service Tax liability of the Contractor etc. needs a detailed analysis. Rate of taxes and duties, exemption, abatement are to be
considered as per their applicability during pre-GST regime. Purchase Invoice, Quotations, Scheduled Rate of material of

TAX BULLETIN MAY, 2018 VOLUME - 15 - THE INSTITUTE OF COST ACCOUNTANTS OF INDIA 1
different authorities are the likely sources to know the unit rate and applicable tax rates in many cases. VAT Returns, CST
Returns, Entry Tax Returns, Service Tax Returns, Excise Returns filed during the pre-GST regime can help one to understand the
applicable tax rate for inward and outward supply made by a Contractor in the erstwhile tax regime.

Input Tax Credit (ITC) available to the Contractor (whether availed or not by the Contractor by filing return), both in pre-GST and
GTS regime on the balance value of Works Contract is to be adjusted while making such tax impact analysis.

A suggested format to make such tax impact analysis is as under:

TAX SHEET FOR TAX NEUTRALISATION

Name of the Work……………………………………………………………………………………….


Agreement No. and Date………………………………………………………………………………
Agreement Value Rs…………………………………………………………………………………….
Bill Passed Upto 30.06.2017 Rs. …………………………………………………………………...
Balance Amount Available as on 01.07.2017 Rs. ……………………………………………..
GSTIN………………………………………….TIN……………………………………….....STRN……………………………………….

Particulars Balance Value (in Rs.) % of Tax/Duty Tax Amount (Rs.)


Taxes on Pre-GST for Balance Amount of Agreement Available as
on 01.07.2017
A) Excise Duty
B) VAT
C) Entry Tax/Octroi Duty
D) CST
E) Services Tax
F) Total Pre-GST Tax ( From A to E)
G) Less: Input Tax Credit available during Pre-GST regime
H) Balance Value of the Contract without Pre-GST Taxes (F-G)
Add: IGST
Add: CGST
Add: SGST
Less: ITC available in GST regime
I) Adjusted Value of Contract as on 1.7.2017
K) Differential Figure Payable/(Recoverable)
% of Difference Payable/(Recoverable)

As a Supplementary Agreement will be made on the basis of certified Work Sheet, one has to take extreme care ensuring that
all possible taxes and duties which the Contractor was liable to pay (or was paying directly or indirectly like Excise Duty though
not visible was a part of material cost) and ITC available to him during the pre-GST regime has been considered on the balance
value of the Contract. Similarly, correct GST rate and ITC available to the Contractor in GST regime is another important aspect
which needs careful study and inclusion in the Work Sheet.

TAX BULLETIN MAY, 2018 VOLUME - 15 - THE INSTITUTE OF COST ACCOUNTANTS OF INDIA 2

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