LABOUR CONTRACTOR UNDER GST

[S.C. WADHWA]

We are in receipt of bill from labour contractor towards supply of labour in factory in Haryana. Since this labour contractor is registered in UP state, he is charging IGST in bill.

Whether this is correct. Please confirm.

AI Summary

Labour contractor must register in Haryana, charge CGST and SGST, not IGST, per CGST Act 2017 guidelines. A labour contractor registered in Uttar Pradesh supplied labour to a factory in Haryana and charged IGST, prompting a query about its correctness. Respondents clarified that the contractor should register in Haryana, where the service is consumed, and charge CGST and SGST instead. According to the CGST Act 2017, registration is required in the state where services are provided, as manpower services cannot be supplied interstate. The absence of centralized registration under GST means state-specific registration ensures state revenue. A contractor can register as a Casual Registered Person to address such situations.