pure labour contract

[varsha jain]

Hello Sir my Query is - ,Mr X. is a works contractor and registered under GST. Mr. y is an unregistered supplier who supplies labour to Mr. X.. would like to know whether Mr X is liable to pay GST under RCM on the amt paid to Mr.Y.

[KASTURI SETHI]

Manpower supply is not under RCM. Supplier will pay GST if turnover is more than ₹ 20 lakhs. 'Y' will collect GST from service receiver and deposit with Govt. If turnover of ₹ 20 lakhs has crossed, 'Y' should get registration under GST.

Supply of Security Service is under RCM.

AI Summary

Clarification: Manpower supply not under RCM; unregistered suppliers must register for GST if turnover exceeds 20 lakhs. A user inquired whether a registered works contractor, Mr. X, is liable to pay GST under the Reverse Charge Mechanism (RCM) for labor supplied by an unregistered supplier, Mr. Y. The response clarified that manpower supply is not subject to RCM. Instead, if Mr. Y's turnover exceeds 20 lakhs, he must register for GST, collect it from the service receiver, and remit it to the government. However, the supply of security services does fall under RCM.