Payment to driver contractors.

836 views 6 replies
sir, 

We have engaged a driver contractor to our compsny, he will supply manpower for delivery of goods from one place to other place. 

We are the responsible person to allocate duty to driver, we are having full rights on driver during his duty time. 

contractor will claim salary, PF and ESI for driver based on his duty performed during the month. 

in addition to that contractor will charge 10% service charges. 

rightly contractor charging 18%GST on his total invoice value including drivers salary, PF and ESI.

we know that the salary will be transfer to drivers account without taking any commission by contractor, so it's purely reimbursement of expense by contractor. 

kindly let me know any possibility to avoid GST on salary part? or possibility to reduce GST outflow in this regard.

we are spending around 50l (GST ONLY) per year in this regard.

please suggest.


note:
1)we are from agriculture industry so we unable to any ITC

2) contractor is a registered individual.
Replies (6)
Are You booked the driver directly or from any firm/company...?
We had an agreement with contractor, He is an individual registered contractor, who will supply drivers based on our requirements.

major portion of his bill is for drivers salary, and separately he will charge 10% as service charges on total drivers salary, but GST he will charge on total bill value.
Yes... He is correctly issue Bills to You. So, No way for escaping the provisions...

Pay GST as per his bills...

( He can give bill without splitting of the details. But, I think he issued with details for Your reference...)
In term of Section 15(2) contractor is liable charge GST on all expenses incurred in connection with supply of goods or Services .

Note : Only "pure agent" who is not required to charge GST on reimbursement of expenses. (Refer explanation to rule 33)
NOTED SIR...Thanks to experts,
You are always welcome

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