GST for contractors and works contracts

A works contract (construction, fitting-out, repair of immovable property with materials) is treated as a supply of services under GST.

Key points

• Most works contracts are taxed at 18%; certain government and specified works attract lower rates
• Bill the full contract value as a service; do not split goods and labour
• Input credit on works contracts and construction is often blocked for the recipient when it relates to immovable property

Rates and exceptions here are detailed, so confirm the rate for your specific work with a CA.