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.

[Rajagopalan Ranganathan]

Sir,

C & Co. have to charge IGST from A & Co the principal contractor since his location is in Karnataka and the supply of service by C & Co., is an inter-state supply.

[Ganeshan Kalyani]

IGST to be charged.

AI Summary

Inter-state supply: subcontractor must charge IGST on invoice to principal contractor located in a different state.
When a subcontractor registered in one state supplies works contract services to a principal contractor whose location of registration is in another state, the supply is an inter state supply and the subcontractor must charge IGST on the tax invoice issued to the out of state principal contractor.