WORKS CONTRACT - TAX

[RV PERUMAL]

Hello friends, I have a situation which needs clarification and advice:

1. Mr. A & Co. is in Bangalore (Principal Contractor) obtained a works contract order from B & Co., situated in Pondicherry state.

2. Issued work order to M/s . C & Co. (Sub-Contractor) situated in Pondicherry to execute the work.

3. After the completion of works, the sub-contractor ( C & Co.) has to issue tax invoice to principal employer ( A & Co. ) situated in Karnataka State, a question is raised whether tax Invoice to issue to his principal contractor under IGST or under CGST & SGST.

Summary:

B & Co. ( Goods & Service Recipient situated & registered in Pondicherry)

A & Co. ( Principal Contractor situated and registered in Karnataka State)

C & Co. ( Sub-Contractor, situated & registered in Pondicherry)

Clarity required: Tax Invoice to issue under IGST or under CGST and SGST.

AI Summary

C & Co. Must Charge IGST to A & Co. for Inter-State Works Contract: Clarification on Tax Invoice Issuance A query was raised regarding the appropriate tax invoice for a works contract involving three parties: A & Co. (principal contractor in Karnataka), B & Co. (goods and service recipient in Pondicherry), and C & Co. (sub-contractor in Pondicherry). The issue concerned whether C & Co. should issue the tax invoice to A & Co. under IGST or CGST and SGST. The responses clarified that C & Co. must charge IGST, as the service supply is considered an inter-state transaction between Pondicherry and Karnataka.