Goods and Services Tax – Started By: – tarun verma – Dated:- 12-7-2017 Last Replied Date:- 21-2-2018 – sir please explain concept of pure labour under construction contract under gst regime…if individual involve in construction service and hire labour from market on daily basis..pay daily wages to them ..gst liabillity on the individual…please guide me on this topic… – Reply By KASTURI SETHI – The Reply = Exempted vide notification no.12/17-Central Tax Rate dated 28.6.17 Serial No.11 Heading No.9954. – Reply By GOKARNESAN.S SUBRAMANIAN – The Reply = Mr. Tarun Varma You have stated that an individual involve construction service. But you have not specify whether the individual is rendering pure labour contract only in the construction activity. In other words, materials supplied by the receiver and the individual undertake only labour work by getting hired daily labour or not. Further, you have also not mentioned whether the individual is doing service for one dwelling unit or mu
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way of pure labour contracts of construction, erection, commissioning, or installation of original works pertaining to a single residential unit otherwise than as a part of a residential complex. As such, the above exemption under serial number 11 is not applicable to you if the individual does a) construction work as a whole including labour b)if such construction involve multiple units (more than one dwelling unit) On the other hand, if the individual does only pure labour contract in the construction activity then he is entitled to exemption subject to conditions stipulated in serial number 11 of the table. FOR ENGAGING LABOUR FROM The labour hired from outside are to be treated as Un-registered persons under GST . Hence, the GST liability on the value of labour paid lies on the service receiver under reverse charge. Again if the individual contractor undertakes the entire construction contract (material with labour), then he will be treated as 'business entity and as such, the
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5000 per dayd) in case of rcm liability to pay tax on contractor ,not on service receiver – Reply By GOKARNESAN.S SUBRAMANIAN – The Reply = Mr. Tarun Verma I answer your queries: Query: a) As you stated individual under take construction contract( material + labour ) , he will discharge liability @18% with taking input tax credit on goods and services.this activity amount to work contract..and in case of work contract no ITC available.because emerging property is immovable.? My Answer:- As a contractor, doing a works contract service – construction service to your customer, you are entitled to take credit of GST involved on goods and services consumed to do the said output supply namely ' works contract;. Full credit is eligible on goods and services. On the other hand, for the customer who avails the 'works contract construction service' from you , whatever GST paid by you as a contractor in your invoice to your customer. The works contract service rendered by you is not
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value of supply, service or both in a single day from all suppliers to decide the eligibility within ₹ 5000/- Query -d) in case of rcm liability to pay tax on contractor ,not on service receiver Answer: This query is not clear. However, the RCM liability on the service receiver . In your example: the contractor received the service of manpower (un registered dealers) and utilise in his works contract service. Hence, the contractor is liable to discharge tax under reverse charge and after making payment, he can take credit as input tax credit of such amount. As far as the availment of manpower services by the contractor, he is the service receiver and not the person to whom the contractor render construction services. S. Gokarnesan Advocate – Reply By tarun verma – The Reply = thanks to sir. Gonkarnesen Subramanian for answered my queries..a) The labour hired from outside are to be treated as Un-registered persons under GST . Hence, the GST liability on the value of labour paid li
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