On 9th November 2021, the Indian Government announced a revised Goods and Services Tax (GST) rate on government works contracts. This decision has come as a relief to the construction industry, as it will help boost the completion of infrastructure projects across the country.

The revised GST rate on government works contracts has been set at 12%, down from the earlier rate of 18%. This new rate will apply to all works contracts entered into by the Central and State Governments, as well as Public Sector Undertakings (PSUs).

This move is a welcome step, as it will reduce the tax burden on contractors and help them save costs. The decrease in the tax rate will also help the government save on expenditure and enable it to allocate more funds towards the development of infrastructure projects.

The GST rate on government works contracts was earlier increased from 12% to 18% in 2017, which led to an increase in the cost of construction projects. This increase in the cost was primarily due to the fact that contractors had to pay higher taxes, which meant that the overall project cost increased.

The decrease in the GST rate on government works contracts will have a positive impact on the construction industry, as it will lead to an increase in the demand for works contracts. Contractors will be able to bid on more government projects, which will ultimately lead to an increase in employment opportunities and the overall growth of the industry.

In conclusion, the revised GST rate on government works contracts is a positive step towards the development of infrastructure in India. It will help reduce the tax burden on contractors and lead to an increase in the completion of construction projects. This decision will also help boost the overall growth of the construction industry in the country.