IS THE GST APPLICABLE FOR LABOR CHARGES By VISHESH JANGIR

The sector of service is without any doubt the most significant field in the country because of accounting 57 percent to India’s GDP. Till June of 2012 Service ad its very own meaning and legal challenges added to it. Although the definition has now narrowed down to a totally distinct procedure to meet the ends. Goods and Services Tax has been added to every sort of service unless it is exempted by the regulations assigning the same. To do the same the government broadens well as narrowed the definition of “Service” underneath the Taxation system of GST.

Now the following things are counted under the Services rendered and are taxed under GST –

1. Service of transacting money but not including the security and money within it.
2. Services transacting money by including money as well as the use of it through conversion or by any other mode. By one from to another currency or denomination to another one. (different consideration being charged)
3. Service Provision through the way of labor

GST ON LABOUR IN INDIA?

• Agreement of work’ means a contract to build, construction, production, completion, assembly, installation, fitting out, upgrade, modification, repair, maintenance, reconstruction, alteration, commissioning of any immovable property involving the transfer of property in goods (whether as goods or in some other context) to the implementation of such agreement.This means Supply of the both goods and labor — The provider is involved in the supply of labor (hired labor from outside) as well as the supply of materials of its own, including such as cement, steel, sand and other resources, that would be known as a ‘work deal.’

The other one is Supply of only hired labor-If the distributor only provides hired labor from the outside and the supplier supplies the products, these agreements would be referred to as “pure labor contracts”

There are some Instances in GST on Labor in India when exemption is allowed. That is when,Services rendered by pure labor contracts for the design, erection, commissioning, installation, completion, installation, repair, maintenance, reconstruction or modification of a civil structure and any other original material related to the construction or modification of the individual property under the Housing for All (Urban) Mission or Pradhan Mantri Awas Yojana by the beneficiary. The other instance is when,Services by means of pure labor contracts for the construction, construction, commissioning or installation, rather than as part of a residential complex, of original works relating to a specific residential unit.

Although there are some instances which do not approve if the supplier is doing the following -

1. Building work as a whole, including labor
2. Multiple units of such construction include (more than one dwelling unit)

LABOUR CHARGES according to GST with Service Accounting Code is 18 % to everytype. That includes Executive or Retained personnel search services (998511); Permanent Placement Services (998512); Control Staffing Services (998513); Long Term staffing /Pay rolling Services (998515); Temporary staffing to permanent placement services (998516); Co-employment staffing services (998517), Other employment and labor supply supply services nowhere else classified (998518)

About Author:

Mr. Vishesh Jangir is a reputed GST practitioner in new Delhi,north-west-Delhi. is recognized for GST Advisory and tax optimization works. Here one can accept full spectrum of work like Accounting Planning, GST tax optimization, GST reconciliation Services are tailored here as per clients requirement.

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