Will the GST applicable if we paid the bonus to the contract employees through the contractor.

[Balamurugan R]

We are having the contract employees in our factory, Contractor is the one point contact and we are paying the wages, bonus to the contractor and they will distribute the same to the respective employees, Now we are paying the bonus to the employees through the contractor, When they raising the bill to us, Do they need to charge GST for this? Kindly clarify

Thanks in advance.

AI Summary

Consideration under GST: bonus paid via contractor is taxable as consideration, contractor must charge GST on invoice.
Bonus amounts paid by a principal employer to a contractor for distribution to contract employees constitute consideration for the supply of manpower services under the CGST framework. Such sums must be included in the contractor's invoice and are subject to GST at the applicable rate; even payments made by the principal under statutory labour obligations and recovered from the contractor are treated similarly as taxable consideration.