Dear sir / madam
We are a partnership firm based in Ahmedabad which provides warehousing and allied services to various clients of government and private sector, for the safe and scientific storage of their different products; such as agricultural produce, text books, paper rolls, furniture items, cement etc.
We have been assessed to service tax since last many years. The service tax department has also conducted 2 audits of our firm for a period of about 8.25 years, starting from the financial year 2009 thru June 2017.
Eventually, after the introduction of the GST act wef July 2017, we were automatically transferred by the department from service tax to Gst, as per their normal practice for all.
We regularly comply for paying the Gst taxes, (which we have collected from our clients) and return filing dates as per the departments guidelines, from time to time.
We also pay Gst taxes on reverse charge mechanism on certain goods and services, received by the firm (and booked under expenses in the P/L account) such as legal expenses, security man power services, commission and brokerage, GTA ( goods transport agency) etc., and avail input tax credit of the same in the Gst ledger.
We also have expenses of other nature such as pure labour charges incurred by the firm for the upkeep and maintenance of the old warehouse from time to time, such as white washing, plumbing, electrification, water proofing, WH flooring repairs etc.
We make payment to these labour people by cheque after deduction of appropriate TDS amount. We purchase material ourselves and supply the same to the labour, so that it is more economical.
My query is whether are we liable to pay Gst on reverse charge on such pure labour charges expenses and on purchase of materials such as steel, wires for electrification repairs, plumbing pipes for plumbing or bore well repairs, cement etc. from unregistered dealers or not??
Not all parties supplying material to us are unregistered. Only a few of them.
Pl let me know.
Thanks
With Regards
Bhavin adhia
Dear Bhavin,
Currently payment under reverse charge on supplies from unregistered suppliers (Section 9(4)) is applicable only in hands of the builders. Further the labour charges , steel ,wires etc is also not notified for payment under reverse charge u/s 9(3) of the CGST Act.
In view of above in our view you are not required to pay any reverse charge liability. For details regarding reverse charge please CLICK HERE…
Team Clearmytax.in
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