GST QUERY # LABOUR COST DEBITED

[ABHILASH PANICKER]

Dear Sir,

We are a manufacturing Unit , using manpower on contract basis ( production & other supportive work ) and take the GST Benefit also .,

Query:-

1 ) We are hiring 0.5% to 1% extra manpower to checking Input i.e. supplier Quality issues (recommend by supplier only ) @ our factory premises and the labour cost amount debited to supplier.,

Know my query is that whether we charged GST on such debit amount or not.

Regards

AI Summary

GST on recovered labour costs may require charging tax and reversal of proportionate input tax credit depending on contract terms.
Whether GST applies to labour costs debited to a supplier for extra manpower used to inspect inputs depends on transaction characterisation and contract terms. If ITC was claimed on manpower services, any recovery from the supplier may require reversal of the proportionate ITC. Manpower supply is generally not under reverse charge here, and the agreement's allocation of costs and supply obligations determines whether the recovery is a taxable supply requiring GST.