08 April 2024
Sir, PSU was entered into MoU with irrigation department for construction of make up water system for its thermal power project. As per terms and conditions of MoU- PSU was required to reimburse GST to irrigation department. The above work was further awarded by irrigation department to private contractor. PSU was also deposit GST under RCM for above work and work executing contractor of irrigation department also deposit GST for above work. Kindly clarify that (1) Wheather psu as well as work executing contractor of irrigation department (both the parties) are required to deposit GST for above work? (2) Wheather any GST exemption available for PSU for above work?
09 April 2024
Sir During the discussion, psu states that above work involves two services first service provdid by irrigation department to psu and second service which is provided by contractor to irrigation department. Thus both the parties pay GST and psu deposit GST under applicable RCM.
09 April 2024
1) Two transactions are involved here Both PSU and Contractor need to pay GST 2) No Exemption on such transaction in GST 3) No RCM in works contract in GST it will be in FCM
09 April 2024
GST not applicable on reimbursement of expenses to irrigation department. GST payable under RCM only on payment for services provided by irrigation department.
10 April 2024
No, it will not fall under such exemption. Double GST payment will not arise. Pay to the contractor directly and pay only service charges to government irrigation department. I am a retired power generation PSU Executive Director/Finance, we followed such arrangements.
CAclubindia
