Work Contract and GST


Works contract is defined u/s 2(107) of Model Act. It means an agreement for carrying out for cash, deferred payment or other valuable consideration, building, construction, fabrication, erection, installation, fitting out, improvement, modification, repair, renovation or commissioning of any moveable or immovable property. It does not cover the activities of maintenance or completion and there will be confusion with regard to taxability of said transactions. From the definition one more feature is worth paying attention that for a transaction to be covered as works contract there is no longer requirement of transfer of property in goods through the principle of accession or accretion. Even without transfer of property in goods, a contract can be regarded as a works contract it falls in the definition.

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