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RCM on labour for construction

piyush (account assistant) (43 Points)

15 October 2024

dear team pls advise that I am doing construction work and register in GST. And I am giving payment to labour for construction is RCM applicable on the payment which I am giving to them.

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Rama chary Rachakonda (Master in Accounts & high court Advocate) (8462 Points)
Replied 15 October 2024

As a construction service provider registered under GST, you need to consider Reverse Charge Mechanism (RCM) for payments made to laborers. Here's a simplified explanation: 1. *RCM applicability*: Under GST, RCM is applicable on certain services, including labor services provided by unregistered persons (like laborers). 2. *Labor services*: Since you're paying laborers for construction work, their services are covered under RCM. 3. *GST liability*: As the recipient of labor services, you (the constructor) are liable to pay GST under RCM. 4. *GST rate*: The GST rate will depend on the nature of construction service and the laborer's location. 5. *Tax payment*: You'll need to pay GST on the payment made to laborers, which will be calculated on the reverse charge basis. To comply with RCM: - Obtain a GST registration certificate. - Identify labor services provided by unregistered persons. - Calculate GST liability on payments made to laborers. - Deposit GST under RCM using Form GSTR-3B. - Maintain records of labor payments and GST paid under RCM.

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sabyasachi mukherjee (27825 Points)
Replied 15 October 2024

You cannot any rcm on this.

piyush (account assistant) (43 Points)
Replied 17 October 2024

Thanks

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