Civil Work HSN Code for GST Filing
Civil work covers construction, repair and maintenance of buildings, roads and other structures. Contractors, builders and project owners must use the correct civil work HSN or service code and GST rate so that contracts, invoices and returns stay compliant.
What is the HSN Code for Civil Work and Construction?
Under GST, most civil work linked with immovable property is treated as a works contract service rather than a sale of separate goods and labour. Such services are usually classified under service code 9954 which covers construction services of buildings and civil engineering works.
| HSN Code | Product Name | Product Description | GST Rate |
|---|---|---|---|
| 9954 | Civil construction of new building | Works contract service for construction of residential or commercial buildings | 18% |
| 9954 | Repair and renovation of existing building | Civil work for repair, alteration, additions or renovation of existing structures | 18% |
| 9954 | Civil work for industrial and infrastructure projects | Construction and civil engineering work for factories, roads and similar projects | 18% |
How Does GST Apply to Construction Work and Civil Construction?
For a typical works contract involving supply of both materials and labour for immovable property, GST is generally charged at 18% under service code 9954. The contractor charges GST on the full contract value and the recipient can claim input tax credit where eligible.
In some specific schemes such as affordable housing or government notified projects, concessional rates may apply subject to conditions like non availability of input tax credit or specific project approval. These special cases must be checked carefully before deciding the rate in the contract.
Why is Correct Classification of Civil Work Important for GST?
Correct civil work classification avoids dispute on whether a contract is a pure labour service, a works contract service or a composite supply with different tax treatment. It also affects whether input tax credit is available to the recipient, especially in the case of construction of immovable property for own use.
Wrong classification can lead to short payment of GST or wrong availment of credit, which may attract interest and penalties at the time of departmental scrutiny or audit.
How to Classify Civil and Construction Work Correctly for GST Filing?
Before raising invoices you should carefully read the contract to see whether it involves transfer of property in goods along with labour. If yes, it usually becomes a works contract service under code 9954. Pure labour contracts without transfer of property may fall under other service codes with different rates.
You should also ensure that your accounting system tracks civil work contracts separately with proper service description, service code and GST rate, so that GSTR one and annual returns show accurate figures for such services.
Conclusion
Most construction and civil work linked with immovable property is treated as works contract service under service code 9954 and taxed at 18% GST, except in special concessional cases notified by the government. Using the right civil work HSN or service code in contracts and invoices helps both contractors and clients stay compliant.
Careful reading of the contract nature and keeping item wise records in your accounting software will make civil work GST reporting much easier.
As a Chartered Accountant with over 18 years of experience, I have honed my skills in the field and developed a genuine passion for writing. I specialize in crafting insightful content on topics such as GST, income tax, audits, and accounts payable. By focusing on delivering information that is both engaging and informative, my aim is to share valuable insights that resonate with readers.
Frequently Asked Questions
-
What is the HSN code for civil work?
Most civil work involving construction, repair or renovation of immovable property is treated as works contract service and is classified under service code 9954 which generally attracts 18% GST.
-
How does GST apply to civil construction and building work?
In a standard works contract, GST is charged at 18% on the total contract value including materials and labour. The recipient may claim input tax credit subject to restrictions for construction of immovable property for own use.
-
Are there different HSN codes for civil work in residential and commercial construction?
Residential and commercial projects are usually covered under the same service code 9954, but some categories like affordable housing may enjoy concessional rates subject to specific conditions in government notifications.
-
How do I file civil work HSN codes for GST returns?
While filing GSTR one you should show supplies of civil work under the correct description and service code 9954 with the applicable GST rate. The same code should appear on tax invoices, e invoices and contracts.
-
Is the GST rate the same for all types of civil work?
The standard rate for works contract civil services is generally 18%, but some specified projects and schemes may have different effective rates. It is important to review the latest notifications relevant to your type of project.