Works contract

This query is : Resolved

Sabita Sahoo (Querist)
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11 September 2017 A registered contractor undertake a govt. Work where he employ only labour and material is supplied by works department.In this case what is the gst liability on works contractor who is only supply labour?.what is input tax credit available to him?.Where in gstr1 he is to show the supply value?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 September 2017 18% GST applicable on such works contractor input credit available. Show the value in gstr-1 under B2C.

Sabita Sahoo

Sabita Sahoo (Querist)
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11 September 2017 What is the input tax credit in this case?Do you mean the amount paid to the unregistered labour @18% under reverse charge as ITC?please clarify with an example.As per sec 17(5) of cgst act,no ITC shall be allowed on works contract service when supplied for construction of immovable property.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 September 2017 GST not applicable on direct labour payment. GST not payable on the inputs so ITC not available.

Sabita Sahoo

Sabita Sahoo (Querist)
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11 September 2017 As per your view gst@18% is applicable on agreement value which is to be shown in B2C gstr1.No ITC is to be claimed.Only TDs deducted is to be adjusted against output tax liability.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 September 2017 ITC can be claimed if there is input GST paid.

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