Economics · Economy
A firm enters into a contract to build a corporate headquarters. The project involves civil construction, installation of a centralized AC plant, supply of furniture, and post-construction maintenance services. The contractor receives an advance before the commencement of work. Analyze the GST implications regarding the nature of supply and input tax credit (ITC).
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1The contract is a Supply of Services; tax on advance is only for the maintenance portion; both parties can claim full ITC.
- 2The contract is a Works Contract as per Section 2(119); tax on the entire advance is payable; the client is barred from ITC on the building and AC plant under Section 17(5).✓
- 3The entire contract is a Composite Supply of works contract; tax on advance is payable immediately; the client can claim full ITC.
- 4The contract is a Mixed Supply taxed at the highest rate; tax on advance is not payable for the goods portion.
Correct answer
The contract is a Works Contract as per Section 2(119); tax on the entire advance is payable; the client is barred from ITC on the building and AC plant under Section 17(5).
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Preparing for Economics?
Practice full-length Economics mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Economy MCQs →Want more practice questions on Economy?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Economics · Economy