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TMI BlogSUB CONTRACTOR OF GOVERNMENT WORKX X X X Extracts X X X X X X X X Extracts X X X X ..... A , a Main Contractor receives contract job from Govt for the construction of road for use by general public. He outsources his work to B , a sub contractor the complete job. B inturns, subcontract the said work to another contractor C , which in turns does the contract job. If A , charges GST @12% to the Government, then at what rate B will Bill to A and C will bill to B ? Please cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rify the same. - Reply By KASTURI SETHI - The Reply = If you want correct and concrete reply, pl.elaborate your query. - Reply By NAMAN DOKANIA - The Reply = As already deliberated, Its like, XYZ PVT LTD gets the contract for construction of road by the State Government. Since, he doesnot have resources to do the work he subcontracts the complete work to ABC PVT LTD, and same way ABC PVT LTD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subcontracts the same to his sister company DEF PVT LTD. DEF PVT LTD does the compleye contract using its resources. Will DEF PVT LTD raise the bill to ABC PVT LTD @12% being a sub sub contractor as jowhere in the recent notification on Works contract says about this. And can ABC Pvt Ltd raise the bill to XYZ Pvt Ltd @12% even though he is not using his resources to complete the work and is jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t outsourcing the same to DEF PVT LTD. Will the work done by ABC PVT LTD be termed in Worka Contract definition ? - Reply By KASTURI SETHI - The Reply = The concessional rate of tax @ 12% is available also to sub-contractor w.e.f. 25.1.18 ( Notification No.1/18-CT(R) dated 25.1.18 ) and NOT to sub-sub-contractor . In this scenario, C (DEF Pvt. Ltd.) is sub-sub-contractor. - Reply By KASTU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RI SETHI - The Reply = Sub-contractor is providing service to Govt. for and on behalf of Main Contractor. Hence sub-contractor's service is to Govt. but sub-sub-contractor is providing service to sub-contractor and NOT to Govt..Hence no benefit of concessional rate of tax is available to sub-sub-contractor. - Reply By GB Rao - The Reply = Dear querist, I agree with Shri Kasturi sir. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reply By Shilpi Jain - The Reply = The rate entry for construciton, repair, etc of road is not recipient specific. So whether the works relating to road, being a WCS, are provided to Govt. or to private parties, the rate of tax would be 12% - Reply By Shilpi Jain - The Reply = In my view the rate of tax for A , B and C would be 12%. - Reply By Amit Agrawal - The Reply = I agree with views of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... my fellow panelist Ms. Shilpi Jain Ji. (Reference: Description of Services / Colum No. 3 of Table at ' iv ' against Serial number ' 3' of Notification No. 11/2017-Central Tax (Rate) as amended ) - Reply By KASTURI SETHI - The Reply = Dear Sir, The issue involved is of sub-sub-contractor. The querist wants to know the status of sub-sub-contractor i.e. Treatment of transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on between C A. The details of notification mentioned by you does not talk of the term, 'sub-sub-contractor'. The first issue involved is of classification and rate of tax will come into picture later on . The issue of 'outsourcing' is also in picture here.The issue is still worth examination. - Reply By KASTURI SETHI - The Reply = The querist is requested to also go throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the following decision :- 2021 (9) TMI 1038 - AUTHORITY FOR ADVANCE RULING, GUJARAT IN RE: M/S. KABABHAI POPATBHAI SAVALIA (SHREEJI EARTH MOVERS) , - Reply By Shilpi Jain - The Reply = The rate entry only talks of the nature of work that is eligible for 12% rate. It does not specify who should be the recipient. So mere fact of it being road works is sufficient to be eligible for 12%. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This rate will be appilcable for contractor, sub contractor and sub sub contractor and so on. - Reply By Ravinesh Sinha - The Reply = Agree with shri Kasturi Sethi ji - Reply By Saurin Shah - The Reply = Sr 3(iv) now does not specify the recipient of the service. Hence, contractor, sub contractor or sub sub contractor does not matter. Rate is fixed only on supply of work and therefore, questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of sub - contracting stands eliminated. - SUB CONTRACTOR OF GOVERNMENT WORK - Query Started By: - NAMAN DOKANIA Dated:- 30-3-2022 Goods and Services Tax - GST - Got 13 Replies - GST - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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