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GST on Sub Contract - Labour

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Libissa

Accountant

337 Points Posted on 18 August 2020

I am Doing Highways Contract Work I have given a Pure Subcontract of Labour Charges to one party and he is not having GST Number ( I want to know For Labour Subcontract I want to pay GST or Not and GST Rate ) if the party is not having GST how can i pay in RCM how much is GST Rate and ican take the amount in same period The Subcontract is getting more than 45,00,000/- the sub contractor to want to register and apply GST or Not monthly i am giveing Rs. 10,00,000/- as labour subcontract no one is having GST what to do

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Quick Summary

This discussion concerns the Goods and Services Tax (GST) implications for highway contract work involving labour subcontracts. The main question is whether GST needs to be paid on labour subcontract charges when the subcontractor does not have a GST number. It explores options like Reverse Charge Mechanism (RCM) and the GST rate, especially when monthly payments exceed a significant amount and the subcontractor's turnover is high. The consensus suggests RCM might not be applicable in this scenario, advising against paying GST under RCM for unregistered suppliers.