Contractor and Labour

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This discussion clarifies the applicability of the reverse charge mechanism (RCM) on labour services like masons and plumbers within construction, particularly for affordable housing schemes. It highlights that RCM is likely applicable if you don't meet the 80% procurement threshold from registered suppliers. You, as the recipient, are generally liable to pay the GST under RCM, and failure to do so can lead to significant penalties, interest, and loss of input tax credit.

Sameer Sheikh

Sameer Sheikh (Querist)

27 July 2025 I am working in Construction which sells affordable Housing Scheme is reverse charge applicable to Mason plumber sanitary department labour ........
If not paid what are consequences...We have to pay or contracter .....

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

27 July 2025 Reverse charge is likely applicable to the labor services (mason, plumber, sanitary department labour) you receive, especially if you don't meet the 80% procurement from registered suppliers rule for your affordable housing project.
You are liable to pay the GST under RCM in these scenarios.
Not paying RCM can result in interest, penalties, loss of ITC, and other legal consequences.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

25 September 2025 Good luck...

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