Supply of service is in Karnataka. whether tax payable under IGST or RCM under CGST/SGST.

[KALLESHAMURTHY MURTHY K.N.]

Sir, 

A registered person in West Bengal sponsored some masonry labourers to Karnataka for building construction work. He raised an IGST tax invoice. The same was paid through the Bank by the service recipient builder. Supply of service rendered in Karnataka. What is the actual tax liability, SGST /CGST or IGST? Whether the builder in Karnataka is required to pay tax under RCM?

AI Summary

Interstate supplier must pay IGST under Section 5; local builder not liable under reverse charge, can claim ITC. A registered supplier from another state provided masonry labour in Karnataka and issued an IGST invoice paid by the local builder. The correct liability is IGST payable by the out-of-state supplier under forward charge; the Karnataka builder is not required to pay GST under reverse charge for this manpower supply. The local builder, if registered and eligible, may claim input tax credit for the IGST paid. Manpower supply for building construction in this description is not covered by reverse-charge notifications, so reverse charge does not apply.