Is the GST applicable for labor charges in job contract work?
If the service provider’s turnover is less than Rs. 20 Lacks For each year, the service provider should not collect GST. However, the sales tax must be paid for this amount paid by the service provider under the RCM and will be required under ITC in the following month (currently under deactivation).
If your question is whether the sales tax applies to the contractual agent – yes the GST applies where this is within the definition of the offer.
If it doubted whether the amount paid to workers working under the contract was the goods and services tax payable on the transaction – if the workers were employed, the GST would not be applied. However, if they are not employed, GST will apply. It should also be noted that workers are small service providers who do not exceed the 20 lakh turnover per year and thus exit the GST scope.
Also, due to the postponement of the reverse shipping mechanism until April, any payments to the unregistered merchant (s) are not liable for GST charges.
Previously in the service tax, incorporated in compulsory reverse charge. Now it is excluded from the compulsory reverse charges u / 9 (3) of the CGST Act, 2016. In the first days of sales tax, there was a taxable dilemma u / 9 (4). But from October 2017, it was made clear that it was not taxable at all.
If the invoice is charged as a business fee, it charges the GST of 18% on the value of the assignment, provided that the service provider’s turnover exceeds Rs. 20 priests per year.