Applicability of RCM to Labour Sub-Contractor

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..... Applicability of RCM to Labour Sub-Contractor
Query (Issue) Started By: - Arunachalam M Dated:- 19-2-2022 Last Reply Date:- 25-2-2022 Goods and Services Tax - GST
Got 4 Replies
GST
Dear Members, Our query is One of the Construction Company is doing construction of building in govt projects using service of Labour Sub contractor (Unregistered Dealer). We need to be clear whether we c .....

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..... an go ahead using by paying GST under RCM for URD LabouSub Contractor. Any Notifications or Circulars in favour or against using RCM for Labour Sub contract under URD. Requesting Experts guidance and advise on this issue. Thanks and regards, Arunachalam M Reply By NARENDER YARRAGORLA: The Reply: No need to pay RCM u/s 9(3) as the service not covered Notification 13/2017 and even RCM u/s 9(4) .....

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..... is not application as the section suspended wef 13-10-2017 Reply By Shilpi Jain: The Reply: Agree. No liability under rcm Reply By KASTURI SETHI: The Reply: I agree with both experts. My further observations are as under :- (i) Sub-contractor is supplying manpower supply service (pure labour service) to Govt. projects for and on behalf of the main contractor (construction company) for constr .....

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..... uction service. (ii) Hence main contractor is, de facto, supplier of pure labour service to Govt. (iii) Manpower supply is not under RCM as per relevant notification as amended from time to time. (iv) Pure labour service is exempted vide Notification no.12/17-CT(R) dated 28.6.17 as amended from time to time up to 18.11.21. (serial nos.3 & 10 refer). (v) Govt. Authority and Govt. entity both ha .....

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..... ve been excluded from the definition of Govt. for the purpose of exemption from GST w.e.f. 1.1.22 vide Notification no.16/21-CT(R) dated 18.11.21 effective from 1.1.22. (vi) In this scenario, the construction company (main contractor) is not a promoter as per definition of 'promoter' under Section 2(zk) of RERA, 2016 adapted vide Notification No.11/17-CT(R) dated 28.6.17 as amended (claus .....

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..... e (xvii) of paragraph 4 .refers) inasmuch as pure labour service is involved. Hence no question of RCM on this ground also. Reply By Ganeshan Kalyani: The Reply: I agree with the view of the experts.
Discussion Forum - Knowledge Sharing .....

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