Everything about GST in Construction Works

Table of Contents

GST is known as goods & service tax. It is a type of indirect Tax which has replaced many old indirect taxes in India, such as VAT, Excise Duty, Service Tax, etc. Although there are still some categories that the GST does not cover, they fall under the same old indirect taxes.
Categories in which the old taxation system is still active

Taxes on Alcohol for human consumption.
Taxes on petroleum products.
All types of Stamp duties.
Services by an employee to the employer concerning his employment.
Court/Tribunal Services, including District Court, High Court, and Supreme Court.
Duties performed by MPs, Panchayats, Municipalities, or any other person who holds a position under provisions of the constitution.
Services of a funeral, burial, crematorium, or mortuary, including transportation of the deceased.

How has GST Helped the Construction Industry & Contractors

No Cascading Effect on Tax – Cascading effect is when a Tax on your Tax is imposed on products & services. It basically means ‘tax on tax”. GST is specifically designed to integrate indirect taxes under one umbrella and allow multi-stage taxing, which eliminates the deadly issue of cascading effects on taxes.
Unorganized sectors are regulated effectively- Before the GST era, many sectors in India, such as the construction & textiles sector, were largely unregulated and unorganized. But now, under GST, there are provisions for online payment and compliance. This has brought accountability and regulation in these industries.
Simple & Easy online procedure- The GST registration & return filing process is straightforward and hassle-free. This has benefited those working in the construction industry as they do not have the time to get different registrations such as VAT, excise, and service tax. Both methods are made online and are super easy to access.

GST Rates for Mostly Used Construction Materials

In general, the percentage of GST for construction services is 18% on the construction of a building, complex, or building intended for sale wholly or partially.
The percentage of GST for the construction of a complex, building, etc which is sold to the customer along with the land is 12%.
GST Council approves the transition plan for 5% rate for under-construction flats, and 1% for affordable housing.

Materials	GST Percentage
Sand	Asphaltic rocks, oil shale/bituminous, tar sand, natural asphaltites, asphalt- 18% Natural sand- 5%
Bathroom interior & appliances	Pipes & tubes fitting- 18% Other appliances- 28%
Granite & Marble	Blocks- 12% Not in blocks- 28%
Mica	12%
Brick	5-28%
Cement	28%
Crushed stones, pebbles	5%
Steel & Iron	18%
Building Stones	5%
Tiles	5%-28%
Coal	5%
Wallpapers	28%
Varnish & Paint	28%
Electrical appliances	28%