Exemption / applicable rates

[SHRIDHAR MOHOLKAR]

An PSU engaged in creating infrastructure works, is in the process of engaging an agency on contract basis for supply of Skilled / unskilled staff. Is this activity exempted from GST, if yes which clause and if not what is the rate of GST. Also please confirm whether Service receiver will pay the tax by deducting it from the agency bills or it is to be claimed by service provider and paid by him. Thanks

AI Summary

GST Applies to PSU Contracting for Skilled and Unskilled Staff; Forward Charge Mechanism in Effect Until March 31, 2018. A public sector undertaking (PSU) engaged in infrastructure projects seeks clarification on the GST applicability for contracting an agency to supply skilled and unskilled staff. Responses indicate that this service is not exempt from GST and is taxable under the forward charge mechanism. The service provider must collect and remit GST unless their turnover is below the threshold limit, in which case the reverse charge mechanism applies, although this requirement is relaxed until March 31, 2018. The recipient can claim a credit for the tax charged by the agency.