Inter State Supply of Labour and GST Registration

[NARENDER YARRAGORLA]

If a Registered dealer from West Bengal, is going to provide inter state labor supply in a factory (Telangana) for fabrication and erections service on material supplied by the factory. In this situation new Registration required in Telangana or not?

[KASTURI SETHI]

New registraion in Telangana not required.

[NARENDER YARRAGORLA]

Thank u sir,for ur response,on what grounds I can defend my clients regarding the issue sir

[KASTURI SETHI]

Place of business is determinant factor the purpose of obtaining registration.

As per Section 2 (85) of CGST Act “place of business” includes -

(a) a place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a taxable person stores his goods, supplies or receives goods or services or both; or

(b) a place where a taxable person maintains his books of account; or

(c) a place where a taxable person is engaged in business through an agent, by whatever name called;

Your client is covered under (a) or (b) above.

Supply of casual labour services is included in the category of Manpower supply under Service Accounting Code no.998519 (Support Services). Your client who is registered in West Bengal should raise invoices charging IGST to the service recipient located in Telangana.

[PAWAN KUMAR]

You need not to obtain any registration but in case of any local services or goods which are under C& S tax structure, in that case you will not be allowed to claim of ITC since you have not registered in that state. Like for labor you will provide some rented premises for stay, rent services will be C&S tax structure but you will not be allow ITC claim since you have not registration. your registration in another state.

[Ganeshan Kalyani]

I agree with the view of the experts.

[Ganeshan Kalyani]

Sri Pawan Sir, the labourers are not lucky to get rooms in any hotel. They are required to stay at site in tent or temporary house. Also they cannot afford swiggy, they have to cook by own. So no ITC will accrue in TL. Registration in TL not required.

[Amit Agrawal]

Many factual aspects needs to be considered before answering the query raised, in my view.

But, allow me to share "broad" contours about my line of thinking w.r.t. subject matter:

If agreement is for pure 'Supply of Manpower Services' where you have not taken & need not be take any labor-law related registrations (or any other registration mandatory under law) in state of Telangana for undertaking subject work, then, you need not take a gst registration under GST at Telangana.

However, if agreement is for 'Fabrications and Erections Services' (and manpower deployed at Telengana site, are working under supervision & control of supplier) and nature of services required the supplier to be physically present at Telangana (say, being directed related to an immovable property), then, you need to take a gst registration under GST at Telangana. This registration will be either 'Casual Taxable Person' or regular registration (depending upon whether you have 'fixed place of business' at Telangana or not).

These are my personal views and same should not be construed as professional advice.

[Shilpi Jain]

No new registration required in TS if he does not have a fixed establishment in TS

AI Summary

Place of business determines GST registration: no local registration for pure interstate manpower supply without fixed establishment; immovable property services require registration.
GST registration in the recipient jurisdiction hinges on the supplier's place of business and service nature: no local registration is generally required for pure interstate manpower supply if the supplier has no fixed establishment there and invoices IGST; registration is required where services involve fabrication/erections on immovable property, the supplier has a fixed place of business, or other mandatory local registrations apply. Absence of local registration can affect eligibility to claim input tax credit for certain local taxable supplies.