Residential under-construction 5%/1% (affordable). Commercial 18% with ITC. Govt infra 12%. Builders lost ITC post-April 2019. Ready possession ZERO GST.
WORKS CONTRACT GST: (1) RESIDENTIAL UNDER-CONSTRUCTION: 5% (no ITC) / 1% (affordable). (2) COMMERCIAL works contract: 18% with ITC. (3) GOVERNMENT INFRASTRUCTURE: 12%. (4) METRO + RAILWAY + HIGHWAY: 12-18%. (5) PURE LABOR contract: 18%. (6) ROAD MAINTENANCE: 12-18%. (7) SOLAR + WIND projects: 12%. (8) AFFORDABLE HOUSING projects: 1%.
BUILDER + BUYER: (1) UNDER-CONSTRUCTION: 5%/1% GST charged on agreement value. Buyer pays. (2) READY POSSESSION (OC received): ZERO GST. (3) BUILDER input GST: cement 28%, steel 18%, paint 18% — significant input. POST-APRIL 2019: builders LOST ITC for residential (5% no ITC). (4) COMMERCIAL builders: retain ITC. STRATEGIC: ready possession purchases save 5-10L on ₹1cr property.
GOVERNMENT INFRA GST: (1) METRO + RAILWAY construction: 12%. (2) HIGHWAYS + ROADS: 12%. (3) WATER + SANITATION projects: 12%. (4) AIRPORT TERMINAL: 18%. (5) DEFENCE projects: 12-18%. (6) BUILDING for govt use: 12-18%. (7) SOLAR/WIND power plants: 12%. CONTRACTORS pay 12% + claim ITC on inputs. Government as recipient — RCM may apply. STRATEGIC: large contractors specialize in govt infra for clear GST treatment.
PURE LABOR CONTRACTS: 18% GST. NO MATERIALS — only labor service. EXAMPLES: (1) MASONRY workers. (2) PLUMBING service. (3) ELECTRICAL service. (4) PAINTING service (labor only). (5) AC INSTALLATION (labor). (6) HOUSEKEEPING + maintenance. WORKS CONTRACT: includes materials + labor. Rate per project type (5%/12%/18%). DIFFERENTIATION CRITICAL for GST registration + filing.
CONSTRUCTION GST STRATEGY: (1) BUYERS: ready possession ZERO GST. Under-construction 5%/1%. (2) AFFORDABLE bracket 1% — major saver. (3) BUILDERS: ITC restrictions post-2019 — factor in cost. (4) COMMERCIAL builders retain ITC — model accordingly. (5) GOVT INFRA: 12% standard — bid pricing factor. (6) WORKS CONTRACT vs PURE LABOR: classify correctly. (7) e-INVOICING > ₹5cr turnover. (8) RCM applicable for govt + specified recipients. (9) AFFORDABLE definition: ≤60sqm metro + ≤₹45L. (10) ENGAGE construction-specialist GST CA for clean compliance.