TaxTMI 
TaxTMI 
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
Exemption / applicable rates
02 Mar 2018 
3 Replies 
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Manpower supply taxable: supplier must charge GST unless below threshold, otherwise recipient may be liable under reverse charge.
Manpower supply by an agency to a PSU is taxable and not exempt. The agency should charge GST under the forward charge mechanism and remit it after collecting from the service recipient. If the agency's turnover is below the threshold and it is unregistered, reverse charge may render the recipient liable, subject to an administrative relaxation noted in the discussion. Recipients may claim input tax credit for tax charged. PSUs are generally above the threshold and agencies should normally charge tax on invoices. (AI Summary)
Manpower supply by an agency to a PSU is taxable and not exempt. The agency should charge GST under the forward charge mechanism and remit it after collecting from the service recipient. If the agency's turnover is below the threshold and it is unregistered, reverse charge may render the recipient liable, subject to an administrative relaxation noted in the discussion. Recipients may claim input tax credit for tax charged. PSUs are generally above the threshold and agencies should normally charge tax on invoices. (AI Summary)