The works contract GST rate has been fixed at 18%. GST ROLLOUT IN DEFENCE The GST is an indirect tax regime that replaces all the central and state taxes with a aim to do away with a highly complex tax regime involving multiple layers of taxation by the centre and the states. It is issues like these that will need to be ironed out to ensure that tax deduction/collection starts in the right earnest from 1st April next year. Rate of GST on Work Contracts. For the present the moment of reckoning for the paying authorities of the Defence Accounts Department and the Armed Forces has stands deferred to 1st April 2018 but it is not too far away to brook any complacency. As per Section 51 of the Central GST Act, 2017, tax is required to be deducted at the rate of one per cent each on account of CGST and SGST from the payment made or credited to the supplier of taxable goods and/or services,  where the total value of such supply under a contract exceeds Rs 25 lakh (excluding Central tax, State tax, Union territory tax, Integrated Tax and Cess indicated in the invoice), except where the location of the supplier and the place of supply is in a State or Union territory which is different from the State or the Union territory of registration of the recipient. This implies that the paying authorities have to play the role of not just tax deductors but also tax collectors. Four, certain services were exempted, or on which Service Tax was charged at an abated rate of 6 percent, in the pre-GST era are now taxable. The date on which the recipient shows the receipt of the goods in his books of accounts Customs, GST relief could save $8.5 billion in Indian armed forces budget By defence.capital on November 2, 2019 • ( Leave a comment ) New Delhi: Exemptions under Customs Duty and Goods and Service Tax on defence equipment bought by Indian armed forces could save up to Rs 60,000 crore ($8.5 billion) of the military budget over a five-year period, the Economic Times reported … Simply put, a works contract is essentially a contract of service which may also involve supply of goods in the execution of the contract. Any relevant material or link can be shared. The process of registration of such authorities has commenced only on 4th October 2017. This issue has resurfaced with the introduction of the GST regime which entails uncertainty about the extent of additional strain it might put on the defence budget. ), Indigenisation of Defence Production in India, UP Defence Corridor garners investments worth Rs 3000 Cr, HAL to deliver 3 Light Combat Helicopters by 31 Mar, BEL exports $48.6 Mn of equipment in 2019-20. In each such case, therefore, the supplier will have to be asked to furnish the detailed breakdown, unless he/she gives it in the invoice on his/her own. The date on which goods are made available to the recipient 2. Ministry of Defence provides the policy framework and wherewithal to the Armed Forces to discharge their responsibilities in the context of the defence of the country.principal task of the Defence Ministry is to obtain policy directions of the Government on all defence and security related matters and communicate them for implementation to the Services Headquarters, Inter … The entire GST regime, including the tax slabs and classification of goods and services under each slab, will be governed by the GST Council comprising the finance ministers of all states and headed by the union finance minister. All new contract opportunities will be advertised and tendered on this platform.   16 July 2017. A prime contractor claiming duty-free entry of defence supplies under tariff item 9982.00.00 must have a copy of the contract certified by the Minister of Public Works and Government Services that the goods on the contract are defence supplies. The GST Council is likely to consider lowering GST on under-construction flats and houses to 5 per cent in its meeting next month, an official said. 4. Global Stem cell Technology (GST) NV is a veterinary biotech company which was founded in 2012 to develop and produce state-of-the art stem cell products for horses and dogs. 20/2017-Integrated Tax (Rate) ,dt. Some of them are located in far flung areas of the country but each one of them is required to register under the GST regime and obtain a unique GST Identification Number, or GSTIN. In those cases where the supplier is not liable to pay the GST because of his/her aggregate business turnover being less than the taxable threshold, the GST is to be paid by the recipient on a reverse charge basis in terms of Section 9 (4) of the said Act. The rate of GST for Works Contract service has been prescribed in serial number 3 of Notification No. This is a comparatively easier task, notwithstanding the loss of revenue that such an exercise may entail. Effie must cover long distances to make these deliveries. Going by the fact that the public sector continues to dominate defence manufacturing in India it is difficult to say whether it actually helped the private sector but one thing is sure: it increased the tax burden on the defence budget without a commensurate increase in the budget outlay.
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