GST ON WORKS CONTRACT SERVICES

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This discussion clarifies the Goods and Services Tax (GST) implications for works contracts, particularly concerning the Place of Supply (PoS) and Input Tax Credit (ITC). It explores scenarios involving sub-contractors registered in one state and main contractors in another, with the immovable property located in a third. The consensus leans towards the location of the immovable property determining the PoS for services related to it, impacting CGST/SGST charges and ITC claims.

Dharmender Leel

Dharmender Leel (Querist)

18 June 2024 A is a Sub-Contractor registered in Haryana got a contract from a Contractor who is registered in West Bengal to Construct a school in Haryana .My query is that what will be the place of supply in this case. Can the contractor take ITC of invoice raised by sub-contractor.

CA. Bhavik P. Chudasama

CA. Bhavik P. Chudasama (Expert)

18 June 2024 As per Sec 12 of IGST Act, Above service is in relation to Immovable Property so , PoS should be Haryana.

Dharmender Leel

Dharmender Leel (Querist)

19 June 2024 I think as A is only a Sub-contractor of Main Contractor acting on his behalf ,the place of supply should be goverened by section 12(2)(a) of IGST Act that is place of supply should be the location of main contractor.

CA. Bhavik P. Chudasama

CA. Bhavik P. Chudasama (Expert)

19 June 2024 Sub Contractor is going to provide Construction Service which is related to Construction of Immovable property, so even that case PoS should be location of Immovable Property.

Dharmender Leel

Dharmender Leel (Querist)

19 June 2024 In that case if sub-contractor is registered in Haryana & immovable property is also in Haryana he will charge CGST &SGST in his Tax Invoice. But the Main-Contarctor who is registered in West Bengal will loose all the Input Tax Credit.
I think Section 12(3) will apply to Main -Contractor only.

CA. Bhavik P. Chudasama

CA. Bhavik P. Chudasama (Expert)

19 June 2024 Even if you take case of Main Contractor providing service in relation to Haryana Property his PoS will be Harayana, he is be liable to take registration in Haryana

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