We are a PVT LTD company into Electrical contracting and taking services from a unregistered Labour supply contractor.
We are paying RCM on his every month. But his turnover is becoming more than 20 lakhs and he is not registered.
Even though we are paying RCM will it affect us as taking services from unregistered person
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Services from Unregistered Labour Supplier
Replies (1)
Hiring an unregistered contractor whose turnover exceeds ₹20 lakh does not affect the company’s compliance, provided RCM is correctly applied. The onus to register and comply with GST squarely falls on the contractor once eligible, but recipient-company compliance is safeguarded if all RCM duties are diligently fulfilled.
It is advisable to communicate formally to the contractor regarding the legal requirement of registration if turnover exceeds the threshold. This protects the company from allegations of abetting non-compliance.
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