GST Taxability....................

[milan bamal]

I was awarded a sanitation tender by the Municipal Corporation.

This supply is exempt from GST.

I assigned this tender to my friend.

At the end of the month, I will submit an invoice to the Municipal Corporation for the exempt supply

On the other hand, my friend issued an invoice in the name of my firm for sanitation services.

So, will my friend charge GST on the invoice or not?

AI Summary

GST exemption for sanitation services is recipient-specific, so subcontracted supplies to a third party remain taxable.
GST exemption for sanitation services is recipient-specific and service-specific, so it applies only when the service is supplied directly to the notified recipient such as a municipal corporation or local authority. If the work is assigned or subcontracted and a third party invoices for the sanitation services, the exemption is not available to that third party because the supply is not made directly to the exempt recipient. The discussion also notes the concern that this approach may create embedded GST cost in public welfare functions where input tax credit is unavailable.