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PURE LABOR CONTRACT

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SHEIK FAREED

TAX PRACTITIONER

46 Points Posted on 05 August 2020

Dear experts,
My client has been doing
business of civil construction with pure labor (no material).

1) Is pure labor contract is fully exempted from GST..?

2) What is threshold limit (exemption) for pure labor contract in GST..?

3) Is TDS applicable..?

4) What was the important notes in GST & Indirect Tax..?

Replies (2)

Quick Summary

This discussion clarifies the Goods and Services Tax (GST) implications for civil construction contracts involving only labour, with no materials supplied. It confirms that pure labour contracts are generally not fully exempted from GST. The threshold limit for exemption is 20 Lakhs (10 Lakhs for special category states). Additionally, Tax Deducted at Source (TDS) is applicable, and the payer is responsible for deducting it. The standard GST rate for such services is 18%.

CA Raj Doshi

Practising CA

5649 Points Posted on 05 August 2020

1. No

2. 20L under GST ( 10L for special category states)

3. Yes person paying the amount might deduct TDS

4. GST @ 18%

Regards
CA. Raj Doshi
R C D & Co.
Chartered Accountants