pure labour under construction contract gst
Query (Issue) Started By: – tarun verma Dated:- 12-7-2017 Last Reply Date:- 21-2-2018 Goods and Services Tax – GST
Got 8 Replies
GST
sir please explain concept of pure labour under construction contract under gst regime…
\nif individual involve in construction service and hire labour from market on daily basis..pay daily wages to them ..
\ngst liabillity on the individual…
\nplease guide me on this topic…
\nReply By KASTURI SETHI:
\nThe Reply:
\nExempted vide notification no.12\/17-Central Tax Rate dated 28.6.17 Serial No.11 Heading No.9954.
\nReply By GOKARNESAN.S SUBRAMANIAN:
\nThe Reply:
\nMr. Tarun Varma
\nYou 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 ha<\/p>\n
= = = = = = = =<\/p>\n
Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n nder the Housing for All (Urban) Mission or Pradhan Mantri Awas Yojana. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n dence get exempted..not being multi residence = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n eived by a registered person from any or all the suppliers, who is or are not registered, exceeds Five thousand rupees) = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n abour @ 500 per day amounts to 5000 per day..so he will not cover under RCM. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" pure labour under construction contract gst Query (Issue) Started By: – tarun verma Dated:- 12-7-2017 Last Reply Date:- 21-2-2018 Goods and Services Tax – GSTGot 8 RepliesGSTsir 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 … Continue reading “pure labour under construction contract gst”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-6006","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/6006","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6006"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/6006\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6006"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6006"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6006"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\nNil
\nNil
\n11
\nHeading 9954
\nServices by 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.
\nAs such, the above exemption under serial number 11 is not applicable to you if the individual does
\na) construction work as a whole including labour
\nb)if such construction involve multiple units (more than one dwelling unit)
\nOn 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.
\nFOR ENGAGING LABOUR FROM
\nThe 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 un<\/p>\n
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\nc) is there is exemption limit on service receive from unregistered person …like in goods limit is 5000 per day
\nd) in case of rcm liability to pay tax on contractor ,not on service receiver
\nReply By GOKARNESAN.S SUBRAMANIAN:
\nThe Reply:
\nMr. Tarun Verma
\nI answer your queries:
\nQuery: 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.?
\nMy Answer:-
\nAs 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.
\nOn the other hand, for the customer who avails the 'works contract construct<\/p>\n
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\nHence, you have to see the aggreagate value of supply, service or both in a single day from all suppliers to decide the eligibility within ₹ 5000\/-
\nQuery -d) in case of rcm liability to pay tax on contractor ,not on service receiver
\nAnswer: 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.
\nS. Gokarnesan
\nAdvocate
\nReply By tarun verma:
\nThe Reply:
\nthanks to sir. Gonkarnesen Subramanian for ans<\/p>\n
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\nReply By tarun verma:
\nThe Reply:
\nunder gst if construction contractor cover under RCM by getting service from labour ( i.e unregistered ) so he will have to get registration under gst, irrespective of thereshold limit ( 20 lakhs.)
\nReply By MELVIN KOSHY:
\nThe Reply:
\nAssume a Contractor who is quoting for a Govt. Dept Work.
\nAn illustration on arriving at final rate of an item by a Contractor for an item to be quoted in price bid is as follows
\nBASIC PRICE (A)
\nSubtract DISCOUNT (B)
\nAdd TRANSPORTATION (C)
\nAdd PROFIT (D)
\nAdd GST at 18% on (A+B+C+D) = (E)
\nTOTAL (F) = A+B+C+D+E
\nAmount quoted by Contractor in price bid = F
\nAs we know, Govt. Dept will incur 12% towards GST on Works Contract offered by the Contractor. Whether Contractor will add 12% to the above value (F) and put his quote in the price bid?
\nPlease give your thoughts
\nReply By vinodh raj:
\nThe Reply:
\nSir,
\nI have doubt.
\nMy friend was pure labour wo<\/p>\n
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