input tax credit on manpower supply charges, Goods and Services Tax - GST

[sachin shilamkar]

We are manufacturer wish to hire manpower for our manufacturing activity from outsource agency. Agency will comply with all statutory requirements. We will pay them service charges on the monthly manpower cost between 5% to 10%.

Bill will be raised as cost + service charges on monthly basis. Can you pls tell us that GST will be applicable only on service charges or on entire bill. Secondly can we get input tax credit of the GST charged on the same bill and utilize it against our GST liability for sale of goods manufactured by us.

Posts / Replies

[Ganeshan Kalyani]

GST is payable on transaction value. Transaction value means any amount payable by receiver of service to the provider of service. In my view GST would be payable on entire amount payable to manpower supply service provider.

Yes the credit is eligible. Thanks.