Today we talk about exemption to Construction service providers in GST Regime. There were too much exemption and Negative list in Services Tax in case of Construction Services as compared to GST regime. There is only TWO exemption notification in this sectors in GST Regime. This notification issued through Notification SL. No. 10 associated with heading 9954 and SL No. 11 associated with Heading 9954. There are huge changes due to withdrawn the lots of exemption notification and remove services from Negative List of Services Tax . In GST Regime Only exemptions with subject to conditions available to the Supplier.
No. 10 of Exemption Notification No. 12/2017-Central Tax (Rate)
Services provided by way of pure labour contracts of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works pertaining to the beneficiary-led individual house construction or enhancement under the Housing for All (Urban) Mission or Pradhan Mantri Awas Yojana.
-Above 9 Services
-By way PURE LABOUR Contracts
-For Services of Civil Structure or;
-Any Other Original Works
-Pertaining to ““Beneficiary Led- individual house construction or; enhancements
-Under the “ Housing for All (Urban) Mission or Pradhan Mantri Awas Yojana”
As per GST law Original works means :” All new construction :
- i)All types of addition and alteration to abandoned or damages structure on land that required to make them workable,
- ii) erection, commissioning or installation of plant , Machinery or equipment or structure ,whether pre-fabricated or otherwise .”
(This exemption is the same as under S.No.12 of Notification No. 25/2012-ST dated 20.06.2012)
No. 11 of Exemption Notification No. 12/2017-Central Tax (Rate)
Services by way of pure labour contracts of construction, erection, commissioning, or installation of original works pertaining to a single residential unit otherwise than as a part of a residential complex. (This exemption is the same as under S.No.13 of Notification No. 25/2012-ST dated 20.06.2012.)
Now the Services by way of pure labour contracts the term “one single family” should be read as one single undivided family and where expense of such construction is being borne in by a single person. GST is payable on construction of a residential complex having more than one single residential unit.
Example : Construction of one big bungalow having more than one rooms in a one unit as per municipal record and can’t separated then exempt from GST.
As per law “single residential unit” means a self-contained residential unit which is designed for use, wholly or principally, for residential purposes for one family;
As per law “residential complex” means any complex comprising of a building or buildings, having more than one single residential unit.