17 August 2018
respected sir, my client is a contractor provides serivce to individual person for contruction his personal house on labour rate basis. what will be the rate of gst on such service. help me
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 multiple units (flats) ?
If the individual is doing the entire construction work (Other than single dwelling unit) for others by deploying his own materials such as cement, steel, sand and other materials with hired labour from outside, then such individual has to be classified as "Construction Service provider under WORKS CONTRACT Classification " and he has to discharge GST liability at 18% on the entire value with full INPUT GST CREDIT on goods and inpur services.
Exemption is given only for two circumstances as detailed in the table - only for pure labour contract
10
Heading 9954
Services provided by way of pure labour contracts of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works pertaining to the beneficiary-led individual house construction or enhancement under the Housing for All (Urban) Mission or Pradhan Mantri Awas Yojana.
Nil
Nil
11
Heading 9954
Services 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.
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 contractor is liable to pay GST under reverse charge and he may eligible to take the tax paid as input tax credit.
I request Experts may give your views and comments on the above
18 August 2018
respected sir, where this concept applicable? Services provided by way of pure labour contracts of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works pertaining to the beneficiary-led individual house construction or enhancement under the Housing for All (Urban) Mission or Pradhan Mantri Awas Yojana.
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