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GST Rate on only Labour supply contructor to works contract

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Tapas Samadder

313 Points Posted on 06 April 2023

Sir, I am confused about this matter. pls. inform GST rate only for Labour supply contructor, labour supplied to works Contract. The contructor may go to composition scheme. Pls. SAC code also.

Replies (2)

Quick Summary

This discussion clarifies the GST rates applicable to labour supply for works contracts. If a contractor opts for the composition scheme, the GST rate is 5%, provided their turnover doesn't exceed £50 lakh, and they cannot charge GST to the client. For contractors not in the composition scheme, the GST rate is 18%. The specific Service Accounting Code (SAC) will depend on the exact nature of the work performed.

CA Mayank A Jain

Chartered Accountant in Practice

855 Points Posted on 06 April 2023

If the contractor is opting for composition scheme, the rate of tax would be 5%. The aggregate turnover of contractor should not exceed Rs. 50 lacs. Further, the contractor cannot collect the tax from the customer, he has to pay from his own pocket.

If the contractor is not under the composition scheme, then the rate of tax would be 18%.

SAC Code would depend upon the actual nature of work. Kindly elaborate on the nature of work for providing the correct SAC code.