Cgst and sgst
Please help me understand -
We are building a residential house from a construction service company -https://www.buildahome.in/.
We signed the contract in May 2022, and the contract clearly said all taxes inclusive. Although they did not mention about the % of Tax.
My question is regarding their claim to say the tax rates have changed from 12% to 18%.
Below is their email, i have read that the rates are different for different construction types. like below ,can you please advise ? -
GST Rates and Categories in Construction
Service/Material GST Rate
Construction GST Rate (General) 18%
Affordable Housing Apartment GST on construction services (from April 1, 2019) - 1%*
GST on Building Non-affordable Housing Apartment (from April 1, 2019)- 5%*
Commercial Apartments in REP (except RREP)- 12%*
Works Contract GST Rate (Material supplied by the contractor)- 12%
Works Contract Services HSN Code and GST Rate (Only labor supplied by the contractor)- 18%
Composite Supply of Works Contract and Goods (Goods < 25% of total contract value)- 18%
Composite Supply of Works Contract and Goods (Goods ≥ 25% of total contract value)- 12%
Cement -28%
Bricks 12%
Sand 5%
We hope this email finds you well. We are writing to bring an important matter to your
attention regarding the GST applied to our services rendered to you
GST applicable during the introduction of the new taxation regime in the country was always
at 12%, from 2017 & we were registered under the same taxation bracket. While all other
construction was at 18%, we enjoyed the benefit and passed on the same to you, when we were
under the 12% bracket.
As per the applicable laws, the GST rate for Works Contract Services was increased from 12%
to 18% effective from July 2022 as per Notification 11/2017. However, due to an inadvertent
oversight, our invoices reflected a GST rate of 12% instead of the applicable 18%.
We deeply regret this error and seek your understanding and cooperation to rectify this. As
you can note from the invoices shared with you, only 12% GST was charged instead of the
required 18%. As a result, the total additional amount payable towards GST is Rs. 3,50,411.29.
The breakdown is as follows:
Total paid after July 2022 charged at 12% – Rs. 58,40,188.13
Additional 6% GST on above value – Rs. 61,90,599.42
Final payable due to rate change – Rs. 3,50,411.29
We kindly request you to remit the additional GST amount of Rs. 3,50,411.29 within the next
15 days to avoid any penalties that may accrue due to delayed payment to the GST
department.