Applicability of reverse charge

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 May 2013 Kindly tell us whether Reverse Charge is applicable on bill payments for labour charges related to following.
1) repair work,
2) maintanance work,
3) electrical installations,
4) cleaning works,
5) Gardning work
6) Other labour contracts where amount is payable on measurement basis i.e per square feet etc.

CA Vikas Acharya

CA Vikas Acharya (Expert)
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10 May 2013 if your co. is body corporate and the providers are individual, AOP, LLP, or partnership Firm.
then reverse charge is applicable for 50% of value.
but the condition is that the above mentioned services covers under works contract i.e, there must be goods in these services and sale tax component on that goods.

so from above name it seems that all are covered under works contract as there could be some material involved,
now u have to check whether material involved or not and whether sale tax chargable on that material in that state or not.
if yes then covered under works contract and reverse charge as mentioned above

Querist : Anonymous

Querist : Anonymous (Querist)

10 May 2013 Thanks for your reply,
but if the contractor is not charging any amount for consumable materials although he is using few consumable in execution of his contract. He is billing only for the labour work, what will be our course of action.

CA Vikas Acharya

CA Vikas Acharya (Expert)
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11 May 2013 if he is billing only for labor and the original contract is for providing manpower only, same conditions as i mentioned above except the reverse charge on SR will be 75% and on SP it will be 25%

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