taxability of following transaction under gst

[Asked by Guest]

respected sir,

please provide me taxability of following transaction under gst

a) Mr. Harish ( Builder ) buys a land and also hire a contractor named Sahil.Sahil buid building on behalf of Harish.all material + labour BILLed in the name of sahil( contractor).Harish only sale flats .

now INPUT tax credit availability to MR.Harish and MR.Sahil

b) in Same above example all material will be provided by builder ( harish).is Harish eligible to ITC on material

c) in point b) if material provide by builder, what ITC available to sahil.

c)

c)

[KASTURI SETHI]

In the first example, Contractor (Sahil) is providing (supplies) taxable service to Harish (Builder). Purchase Bills are in the name of Contractor, Sahil (Contractor) is eligible for ITC and not Harish(Builder).

In the second instance, Harish (Builder) is providing service (Supplies) to the buyers of flats (Consumers) direct by engaging manpower (Contractor and labourers). Since Harish (Builder) is liable for discharging GST, he will avail ITC. Contractor will pay GST under the category of manpower. Manpower is not under RCM now. In the second example , Pure labour is not exempted from GST.

AI Summary

Input tax credit entitlement depends on who is invoiced: contractor billed gets ITC, builder billed gets ITC.
When a contractor bills materials and labour in his own name, the contractor alone is entitled to input tax credit; the builder cannot claim ITC. If the builder supplies materials to the project and supplies flats to buyers, the builder is liable to discharge GST and may claim ITC on materials. Contractors supplying manpower must charge GST on their services and may claim ITC on inputs invoiced to them; pure labour/manpower services are treated as taxable and not subject to reverse charge in the described scenario.