While GST has clearly defined the works contract as a service that provides some clarity, more information is needed, especially in the areas of pre-tax credit and comparison systems. Otherwise, the same confusion and lengthy costly litigation will also be visible under the GST regime. The authors of the encyclopecier attempted to analyse certain aspects that might be relevant for a provider providing services that have not yet been completed at the time of the implementation of GST. The above discussion is based on the experience gained at the time of the introduction of VAT. Feedback – [email protected] or [email protected]. In addition, under the existing Services Tax Act, there could be an exemption for services provided to the government, for example. Β construction of road works, pipelines, dams or other irrigation works, etc. These contracts are of considerable value and cover both the value of materials and services. It is very unlikely that tax exports in the GST system for this type of contracts will continue, and if they are subject to a normal tax rate of 22%, you can imagine what would happen to the service provider. None of these infrastructure projects have as much room for manoeuvre. A number of proposals could be made below, which could safeguard the interest of the service provider: this treatment of the works contract as a service and not as a supply of goods will bring urgent clarifications to the works contracts. Under the previous regime, different states had different VAT rules. There were different composition schemes, with different VAT rates.
The service tax has also been complex, with a 60% reduction for new works and a 30% reduction for repair contracts. GST replaces those which, with a much simpler and simpler calculation, are the second contract for services currently exempted/interposed: the service provider can currently provide services falling under the exemption declaration or the negative list. Most of the derogations currently granted should be abolished under the GST system. As a result, for the first time under the GST regime, the service provider may be exposed to the indirect tax system. These providers will be the most likely to be affected, as the current zero tax rate is expected to be between 20 and 24%, which will have a direct impact on costs, especially in B2C cases where the final consumer may not be entitled to charge the tax collected by the service provider. In the case of ongoing contracts that are expected to overlap in the GST system, these providers could be subject to the following main elements: (4) Construction contracts: the taxation of works contracts under the current tax regime is the most complex, since it can encompass excise duty, VAT/TSC and service tax on different elements of a single turnover. Under the current system, tax is levied on various elements of taxation, i.e. the production, sale and provision of services. However, under GST, it is likely that all these taxable events will be combined and there will be only one taxable event, that is, . . .