GST leviability on reimbursement expenses, Goods and Services Tax - GST

[phaniraju konidena]

Dear Experts,

We have reimbursed the PF and E.S.I expenses of our production contractor's workforce as per the agreement in between us. Kindly advise whether there is any GST liability on us?. We have not received any services/goods from the contractor for such amount.

regards,

phani

Posts / Replies

[Rajagopalan Ranganathan]

Sir,

You are availing 'Man Power supply service by your contractor. Hence you are liable to pay GST under reverse charge mechanism if your contractor is not body corporate. If your contractor is body corporate then liability to pay GST is on your contractor.. GST is payable on entire amount charged by your contractor, that is, including P.F. and ESI expenses whether GST is paid by you under RCM or GST is paid by you contractor.

[phaniraju konidena]

Sir,

GST along with the P.F and E.S.I is being paid by the contractor on manpower supplies whereas we are only reimbursing the expenses of statutory expenses (P.F & E.S.I) as per agreement.

[KASTURI SETHI]

Man power supply is not under RCM. It is under FCM. Liability is of service provider. GST is payable on salary, PF, ESI, supervision charges etc. See Section 15 (2)(b) of CGST ACT Security Agency Services are under RCM if provided to a registered person.It is w.e.f. 1.1.19 Serial no.14 of Notification No.13/17-CT(R) dated 28.6.17 as amended refers.

[phaniraju konidena]

Thank you sir