Issue of Diesel by Main contractor to Sub contractor

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This query is : Resolved

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This discussion clarifies the tax implications when a principal contractor supplies diesel to a subcontractor. If diesel is supplied on a cost recovery basis, and VAT was already paid on its purchase, further GST or VAT may not be applicable on the debit note to the subcontractor. However, if the supply is considered a sale, VAT might apply depending on registration status.

P RAVICHANDRAN

P RAVICHANDRAN (Querist)
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19 March 2022 We have a material handling and transport contract. We are principal contractor. We purchased diesel from IOCL and issued to sub contractor on recovery basis. We paid VAT to IOCL. We have debited to sub contractor exactly actual cost of diesel as per IOCL invoice. Does this debit note attracts further GST Or VAT?