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Tax invoice

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Deepa

ca final student

33 Points Posted on 12 November 2020

whether labour charge is taxable under gst.
for example if we sale certain material for Rs1000 and charged gst @ 18% and charges labour charges Rs200,for Rs200 gst is applicable.
kindly advise

Replies (4)

Quick Summary

This discussion clarifies whether labour charges are taxable under GST when supplied alongside goods. The consensus is that if labour is naturally bundled with the main product, it constitutes a composite supply. As per Section 8 of the CGST Act, the entire composite supply, including labour charges, is taxed at the rate applicable to the principal product.

Shivam RC

Student

23693 Points Posted on 12 November 2020

Yes, GST would be applicable on the entire amount of Rs. 1,200 @ 18%. It's a Composite Supply and the labour service is naturally bundled with the Principal / Main Product. And as per the Provision of Section 8 of the CGST Act 2017, Composite Supply shall be taxable at the PRINCIPAL PRODUCT RATE.

Hence 18% GST would be applicable on the entire value of Rs. 1,200 ( Rs. 1000 Material Rate + Rs. 200 labour charges ).