GST is stated, and you know who pays it
Why — act while you have leverage
An eighteen per cent tax that is not mentioned is not an eighteen per cent saving. Some agreements were silent on it entirely, on sums where the tax ran to lakhs; one claimed an exemption on a legal basis that does not support it.
What to look at
- The rate, and whether the contract sum includes it
- Who pays the tax on materials invoiced separately
- A GSTIN on the document if GST is being charged
How to check it yourself
Find GST in the document. It should say the rate, whether the quoted sum includes or excludes it, and who bears the tax on materials bought in your name. If an exemption is claimed, ask which provision it rests on and check it - an exemption claimed wrongly becomes your liability, not theirs.
Where this comes from: Kolo review of Kerala construction quotations and agreements (established trade practice)
More construction agreement checks before you sign
- Agreement check passed
- Contractor background verified
- Site handover checklist agreed
- Worker-welfare rules applicability checked
- GST treatment understood before signing
- The payment schedule keeps money back until the end
- The agreement does not contradict itself
- You know who you are contracting with
- Price escalation has a limit you can calculate
- Foundation extras cannot be open-ended
- Curing is the contractor's job, in writing
- The arbitrator is not chosen by the contractor alone
- There is a warranty, and it has a length
- Worker safety stays with the contractor
- Signing for a stage does not sign away everything after it
- There is a way to settle a dispute short of court
- Cancellation terms are not written by one side
- Nobody else builds your house without you knowing
- No blank spaces, no missing dates
- Money goes to the company, not to a person
- You can ask where the money went
- Delay has a consequence for both sides
- The quotation is attached to the agreement
- Force majeure is not a blanket excuse
The whole stage: Construction agreement checks before you sign