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Work Contract Service or Normal Service

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Jethmal Singhvi

Chartered Accountant-Practitioner

140 Points Posted on 12 March 2018

Dear experts,

OFC Service (Cable Laying Service)
is a work contract service or not ?

As in this work contractor received all kind of materials which is rarely needs, get from contractee and in very rare case contactor has to arrange on its own. So basically there is no transfer of property of goods.

However contactor use HSN code for work contract.

So if it is a work contract service than input of GST is available to that contractor or not ?

All type of work contract services provided to big companies like L & T etc. In very rare case to Govt.

please read the Query and clear the confusion in new era of GST.

Replies (1)

Pankaj Rawat

GST Practitioner

55067 Points Posted on 12 March 2018

Supply of both material and labour - The supplier is engaged in supply of labour ( hired labour from outside) alongwith supply of own materials such as cement, steel, sand and other materials, then such service would be classified as a “works contract”.

“Works contract” means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration, commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract.

The expression ‘works contract’ is limited to contracts to do with immovable property.

Supply of only hired labour – If the supplier is providing only hired labour from outside and the materials is provided by the supplier, then such contracts will be called as “pure labour contracts”.