GST on Manpower contract

[Guest]

If a manpower contractor provides unskilled manpower to a manufacturing company, when they generate bill, they will charge cost per manday which is inclusive of PF and ESI to the engaged manpowers. As well as, they will charge some amount towards service charge ( Service charge / Manpower ). GST charged on total amount of bill.

Here, salary will be transferred to concerned manpower, only service charge will be the income of the contractor.

Regarding PF & ESI also has to pay to government and shown to company to get full amount.

Request the forum on the following:

1. GST has to charge on total bill amount or their service charge

2. There is no value addition on PF & ESI, can we treat as reimbursement

Please guide us.

AI Summary

GST Applies to Total Bill Amount for Manpower Services, Including PF and ESI; Not Just Service Charge. A manpower contractor inquired about the application of GST on their services, specifically whether GST should be charged on the total bill amount or just the service charge. The bill includes costs per manday, covering PF and ESI, and a separate service charge. The contractor sought clarification on whether PF and ESI should be treated as reimbursements due to no value addition. A respondent advised that GST should be charged on the total bill amount, not just the service charge, and that PF and ESI cannot be treated as reimbursements.