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GST rate for sub contracting machinery repairs services

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15 September 2021 A private limited company has secured ship repair services contract from its client. As Notification 2/2021 central tax (rate) dated 2-6-21 is applicable to company, it will charge 5% GST on repair services provided by it. Now, the said company desires to subcontract some of the work to another service provider so as to complete main repairing work in time. Can the said sub contractor charge same reduced GST rate of 5% to the company who is main service provider ? Moreover, will situation change if main service provider company purchases goods and material needed for repairs from supplier and ask supplier to charge only 5% GST on supplied goods? OR else the company will have to claim refund of ITC as inverted rate duty structure u/s 54? please reply with legal clauses of GST as soon as possible
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
16 September 2021 Yes, sub contractor can charge 5% GST on service provided. Charge GST separately on supply of goods at the applicable rates.
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