GST Structure on Turn-key solution for an Architect

- Construction services provided by a contractor are treated as works contract services and liable to pay GST. In your case, below factors will be crucial.

- Place of Supply of services

- Time of Supply

- ITC provisions

- Place of Supply of services will be the location of immovable property. If both the supplier and location of immovable property is in Odisha, you will be liable to pay CGST and SGST otherwise IGST.

- Time of supply is the collection and payment of tax to the government. It can be regulated through the agreement between you and the customer. It is time of raising an invoice.

- ITC plays an important role in case of works contract services. It is advisable to outsource the work to some other sub-contractor who is registered in GST and avail the ITC. GST on material i.e. cement, steel and iron, bricks is also available.

Please take phone consultation for detailed discussion.

1) Pure labour contracts is exempt from GST. If it is works contract services then taxable.

2) It will be a continuous supply of services under the GST. Invoice should be raised on due basis on or before the payment dates mentioned in the contract or or on or before the date of actual payment. Payments can be linked to the stage of construction. Entire payment at the end of work is not justifiable. 

3) Prepare separate invoice for Architect services and construction services with clear description in the Invoice. Sub-contractor should raise invoices in your firm name. 

4) You should evaluate both the options. 

Option 1 - Works contracts services to the clients with complete ITC available to your firm. 

Option 2 - Pure labour services directly to your client and he arranges material. 

Hello Mr Manas,

You have rightfully heard, Build of single residence by way of service of pure labour contract is exempt from gst.

So you can raise invoice in 2 parts where you charge your customer separately for only labour part on your letter head (imp note: which will be equivalent to amt charged to you by GST registered Contractor). second part will include Bill for your service i.e architecture service & other construction work in which GST will be charged ,collected from client & deposited after adjusting ITC.

On all the services which you have received (for task other construction) you can claim credit & pay that much lesser to govt.

Thanks. :)