The State government has asked all local bodies to become GST compliant, besides issuing guidelines on the incidence of Goods and Services Tax (GST) on various public works undertaken by them.
Each local body will be required to take separate GST registration in the name of the respective secretaries. Each local body has been asked to depute an officer or a financial expert to attend to the GST filings.
The local bodies have been directed to make the relevant entries on the specified forms related to all sale, purchase, and net payments and file these on the GST portal promptly. The respective local body secretary will deposit the GST amount within five working days. Erring officials will be penalised for failure in filing returns on time or lapses in calculating tax.
Since GST has already come into being, bills related to works completed after July 1, 2017 will attract GST-TDS @ 2%, but collection of the levy will be deferred till March 31, 2018 as per the decision of the GST council.
According to the guidelines, all sales made by local bodies will attract GST as per the notified rates. The State government has also notified the GST rates for some of the construction materials such as cement, tiles, solid blocks, paint, and glass in the 28% slab, bitumen, steel, timber, and PVC pipes in the 18% slab, and broken stone (aggregate) and soil in the 5% slab.
Exemptions
The fee paid for building permits or regularisation of construction under the Kerala Building Rules is exempted from GST. All services provided by the local bodies are also exempted from GST. However, GST will be levied on the rent component of shopping complexes and auditoriums.
The government has also notified the works that would qualify for GST compensation and the extra tax burden on works awarded at pre-GST rates.
