Applicability of GST for Labour hired through a Labour Supplier

[Suryanarayan Rajendrababu]

Would appreciate if we get a suitable guidance and clarification to a situation that we are facing presently regarding understanding the applicability of GST. In order to explain our issue, wish to elaborate as follows:

1. We are into execution of a Project a site which involves Erection and Commissioning of a solar power project.

2. We have been engaged by our Customer to carry out the said work. This involves we hiring labours supplied by a Labour Supplier Firm. They have a registered GST along with ESI and PF too. Now, the following typical working which we wish to list out to understand what would be the basis of computing GST payable:

(a) The Labours would be paid as per minimum wages = ₹ 450/-.

(b) ESI would be aound 4% on this which is payable.

(c) PF would be @ 12% plus 12% (Total 24%).

(d) Service charge payable to the Labour supplier is 10%, which we presume should be on ₹ 450/- and should not include the items under (b) and ( c) above.

(e) Finally once they Invoice us, the 18% GST (guess the rate is correct) payable should be on ₹ 450 + 10% (18% on ₹ 500/-) or should it include the total of ESI and PF payable too ?

(f) Further in such a case TDS deductible should be on which amount ?

We would be highly grateful if a clarity / guidance is given to us at the earliest please.

Thanking you all in advance..

AI Summary

GST on Labor Supply for Solar Projects: Calculate on Total Invoice, Including ESI & PF, per Section 15, CGST Act 2017. A discussion on the applicability of GST for labor hired through a labor supplier for a solar power project. The main query involves whether GST should be calculated on the basic wage plus service charge or if it should include ESI and PF contributions. Responses indicate that GST should be calculated on the total invoice amount, including ESI and PF, as per Section 15 of the CGST Act 2017. TDS should be deducted on the invoice value before GST. Manpower supply services are subject to an 18% GST rate under Chapter 9985, with no deductions allowed from the transaction value.