TaxTMI 
TaxTMI 
A PRIVATE LTD COMPANY'S DIRECTOR CONSTRUCTED HIS RESIDENCE HOUSE. THE LAND, PLAN APPROVAL AND EVERY THING IN THE NAME OF HIM. BUT THE CONTRACTOR'S PAYMENT IS MADE BY COMPANY. HENCE, GST DEPARTMENT ASKED TO PAY GST @ 18% INSTEAD OF 12%. WHETHER IS IT CORRECT OR NOT. PLEASE GUIDE
WORKS CONTRACT
22 Mar 2021 
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De facto service receiver concept: payer-treatment can determine who bears GST liability for construction services.
Dispute concerns whether company payment for construction of the director's private residence makes the company the taxable service receiver. Advisers state that the payer is generally the de facto service receiver, but where payments are made on behalf of the director and recorded as loans or advances, legal liability may remain with the director. Compliance with the notification dealing with pure labour contracts for single residential units is determinative of the applicable GST rate. (AI Summary)
Dispute concerns whether company payment for construction of the director's private residence makes the company the taxable service receiver. Advisers state that the payer is generally the de facto service receiver, but where payments are made on behalf of the director and recorded as loans or advances, legal liability may remain with the director. Compliance with the notification dealing with pure labour contracts for single residential units is determinative of the applicable GST rate. (AI Summary)