The essentials, in plain English
For a construction contractor, GST comes down to four questions on every bill: what SAC, what rate, which tax split, and on what value. Works-contract services are classified under SAC heading 9954; the headline rate for most works contracts is 18%, though specified categories (certain government, infrastructure or affordable-housing works) can be 12% or concessional. Whether you charge CGST+SGST or IGST depends on whether the supply is intra-state or inter-state — and for construction the place of supply is generally the site's location. The tax is computed on the taxable value of the running-account bill. Because rates and conditions do change, treat this as orientation and confirm specifics with your CA.
Not tax advice: GST rates, SAC sub-codes and RCM conditions are updated periodically. Verify the current position for your contract with a qualified professional.
The four decisions on every bill
| Decision | Typical answer |
|---|---|
| SAC | 9954 (works contract) — sub-code by work type |
| Rate | 18% common; 12%/concessional for specified works |
| Split | CGST+SGST intra-state · IGST inter-state |
| Value | Taxable value of the RA bill (certified work) |
RCM, ITC and a few traps
A few things catch contractors out. Reverse charge (RCM) can apply to specific supplies (for example certain services or purchases from unregistered suppliers under defined conditions) — where it applies, the recipient pays the GST. Input tax credit (ITC) on works contracts is restricted in some situations (notably where it relates to construction of immovable property on one's own account). And on RA bills, GST is on the taxable value — so retention, advance recovery and TDS interact with the base value in a specific order. Getting that order wrong is a common reconciliation headache, which is why applying it in software beats a spreadsheet.
How software keeps GST correct on RA bills
GST billing software stores the SAC, rate and tax split per work order and applies them automatically to each RA bill, alongside retention and TDS, so the taxable value and tax split are consistent every cycle and your returns reconcile. Try the free GST calculator for quick checks.
Frequently asked questions
What SAC code for works contracts?
Generally SAC 9954, with sub-codes by work type — confirm with your CA.
What GST rate applies?
18% for most works contracts; 12%/concessional for specified categories. Verify current rates.
CGST/SGST or IGST?
CGST+SGST intra-state; IGST inter-state (place of supply = site for immovable property).
How is GST shown on an RA bill?
On the taxable value at the applicable rate, split per the work order — automated in True Site Sync.
Apply GST right on every bill
Start free — SAC, rate and split stored per work order and applied automatically.
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