Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 6-9-2017 Last Replied Date:- 10-9-2017 – The activities in relation to Government contracts has assumed great importance in the modern times with Government working on major projects either by way of public private partnerships or through technically and professionally qualified contractors. A contract to which the Central Government or a State Government is a party can be called a Government Contract and the party who is required to execute the contract for or on behalf of Government is referred to as a Government Contractor . Contract could take any of the form such as fixed-price contracts, cost-reimbursement contracts, fixed price or incentive contracts, indefinite – delivery contracts etc. In Government contracts, generally, open tenders are floated through sealed bidding and Request For Proposals (RFP) may be invited. Government engages contractors, who are generally empanelled with Government or Government agenci
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can not be categorized as works contract. In case of supply of goods and services in relation to supply of goods which are movable, the transaction of such nature would either be classified as composite supply or mixed supply for the taxability of which separate provisions have been made in CGST law. There should be a contract to provide / undertake works contract. The activities to be undertaken under a works contract may be one or more of the following : Building Construction Fabrication Completion Erection Installation Fitting out Improvement Modification Repair Maintenance Renovation, Alteration, or Commissioning Such activities shall be in relation to any immovable property. Works contract including transfer of property in goods, (whether as goods or in some other form) involved in the execution of a works contract shall be treated as supply of service. Tax Deduction at Source (TDS) Under GST regime, as per section 51 of the CGST Act, 2017, the Central or a State Government may m
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ificate will be 5 days and if any deductor (i.e., Government) fails to furnish the certificate within specified time then such deductor will be liable to pay late fees of INR 100 per day but subject to maximum limit of INR 5000/-. The deductee (i.e., contractor) shall claim credit, in his electronic cash ledger, of the tax deducted and reflected in the return of the deductor (i.e., Government) filed under section 39(3), in the prescribed manner. Section 39(3) provides that every registered taxable person required to deduct tax at source shall furnish, in such form and in such manner as may be prescribed, a return, electronically, for the month in which such deductions have been made along with the payment of tax so deducted within ten days after the end of such month. For any excess or erroneous deduction of TDS, refund can be sought by deductor or deductee under the relevant provisions of GST law. However, in case the amount of TDS deducted and deposited has been credited to the elect
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