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2021 (1) TMI 336 - AAR - GSTClassification of service - Pure agent or service provider - applicable rate of tax - applicant is a service provider and intends to work as a Pure Agent for a company which will be the recipient of the labour supply services - HELD THAT:- The applicant has entered into an agreement with the company for supply of labour and in the clause “Description of Work” of the agreement, it is clearly mentioned that, contractor shall supply labour in each shift (All the three) as per the requirement of the organization; contractor shall be paid at 17000.00 on the total bill raised by him for each worker supplied by him per day and the labour employed by the contractor shall follow the safety norms strictly including prohibiting smoking inside the premises. These terms and conditions clearly indicate that the applicant is engaged in the service of supply of labour. The agreement also provides that the contractor engages all persons in all respects and assumes responsibilities under various Acts, viz. the Factories Act, 1948, The workman’s Compensation Act, 1923, Contract Labour (Regulation and Abolition) Act 1970, Employees State Insurance Act and Employees Provident Funds Act, 1952 etc. Further, it also provides that the contractor has indemnified the recipient against all claims and that in the event of the recipient having to pay any amount due to non-observation of the various provisions under the Act, the contractor shall be liable to reimburse the aforesaid amount to the company. The applicant does not satisfy any one of the conditions mentioned in the Rule 33 of CGST Rules, 2017 which are required for acting as a “pure agent”. Hence we conclude that the applicant cannot be categorized as a “pure agent” as such he is engaged in the supply of labour service. The supply of labour service is taxable under GST Act/Rules, therefore applicant is liable to pay Goods and Service Tax on the supply of said service provided. Classification of service - applicable rate of GST for service of supply of labour - HELD THAT:- The nature of service provided by the application is covered under the Service Accounting Code 998519 - Other employment and labour supply services nowhere else classified - The Service provided by the applicant merit classification under SAC 998519 and applicable rate of GST would be covered under entry No. 23 of Notification No. 11/2017. Accordingly, applicable rate of GST for the Service provided by the applicant would be 18% in terms of Sr. No. 23 of Notification No. 11/2017-CT (Rate) dated 28.06.2017.
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