Applicability of RCM to Labour Sub-Contractor

[Arunachalam M]

Dear Members,

Our query is One of the Construction Company is doing construction of building in govt projects using service of Labour Sub contractor (Unregistered Dealer).

We need to be clear whether we can go ahead using by paying GST under RCM for URD LabouSub Contractor.

Any Notifications or Circulars in favour or against using RCM for Labour Sub contract under URD.

Requesting Experts guidance and advise on this issue.

Thanks and regards,

Arunachalam M

AI Summary

Reverse charge mechanism: not applicable to unregistered labour sub contractors supplying pure labour for construction, no RCM liability.
Where a main contractor engages an unregistered labour sub contractor to supply pure labour/manpower for construction, the Reverse Charge Mechanism does not apply: such manpower supply is excluded from RCM coverage under the relevant notifications, pure labour services have been subject to exemption provisions removing GST incidence during their operative period, and the characterization of the main contractor as the de facto supplier of labour does not create RCM liability.