GST for Contractors: What to Charge in 2026
GST rates for civil, interior and subcontract work — what's taxable, what's exempt, and when reverse charge applies.
June 2026 · By Rajni Sharma
GST rate for most construction work
Most civil and construction contracts attract 18% GST (9% CGST + 9% SGST or 18% IGST for inter-state). This applies to new construction, renovation, interior fit-out and maintenance contracts.
Affordable housing exception
Construction of affordable housing (under PMAY and similar schemes) attracts a lower 12% GST. Check the exact scheme definition before quoting.
Reverse charge for subcontracts
When a main contractor is registered and gives work to an unregistered subcontractor (labour only), reverse charge applies — the main contractor pays the GST, not the sub. Keep this in mind when comparing quotes.
Input tax credit
You can claim ITC on materials (cement, steel, paint, wiring) purchased with a GST invoice. You cannot claim ITC on purchases from unregistered dealers — always insist on proper invoices from your material suppliers.
Register if you cross ₹20L
Contractors with aggregate turnover above ₹20 lakh (₹10L in special category states) must register for GST. Issue proper tax invoices on every contract to avoid notice.
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