Gst on contractors

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Gopi S (Querist)

13 June 2018 Hi Sir /Madam..
Can someone solve my query.

What about the GST for contractors? For example, a contractor for a building received 25 Lakhs from his owner for a month. Out of it he pays Rs. 22 Lakhs for Labour. The balance 3 Lakhs is his share of income. Whether he is liable to charge and collect GST from his owner? If yes, on What amount? What if his Receipts from owner is more than Rs. 20L and Share of Income is lessthan 20L. Whether he is liable for registration?

Waiting for the clarification. Thanking you.

CA Padmasri Manyam

CA Padmasri Manyam (Expert)

13 June 2018 Some clarity is required for your question.
Whether it is JDA agreement? revenue sharing or flat sharing?
or the contractor in this case is just providing construction services to the land owner and receiving consideration?

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Gopi S

Gopi S (Querist)

14 June 2018 Hi Mam..
Thanks for the reply.
There is no any JDA between them. contractor is just providing construction services to the land owner and receiving consideration. Let me know the GST applicability.

CA Padmasri Manyam

CA Padmasri Manyam (Expert)

14 June 2018 Supply of construction services are considered as supply of service. The tax has to be paid on full value of consideration received from the land owner. In the given example the consideration received for construction services is Rs.25 Lakhs. Contractor has to issue tax invoice as supply of service and charge GST on 25 Lakhs.
The rate of tax depends on the nature of construction. Please refer Notification No.11/2017-Central tax(rate) as amended.
Link for said notification: https://www.cbic.gov.in/htdocs-cbec/gst/Consolidated_notification_CGST_11.pdf.
Further, there are certain exemption available in case of pure labour contracts. refer Notification No.12/2017-Central tax (rate) as amended.
Link for said notification: https://www.cbic.gov.in/htdocs-cbec/gst/Consolidated_notification_CGST_12.pdf

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