GST charging of igst done on labour work

Discussion in 'GST (Goods & Service Tax)' started by hitler, Sep 11, 2017.

  1. hitler

    hitler New Member

    Respected Sir,
    As regarding above subject, my query is that one of my client's customer has charged igst on labour charges bared by him on goods sent to him & has sent the invoice of it to my client then can I take credit on that invoice.Please reply.
     
  2. CA Saloni

    CA Saloni New Member

    yes of course you can take credit because it is directly related to your business
     
  3. RAMESH KUMAR SINGLA

    RAMESH KUMAR SINGLA New Member

    The customer of your client has been supplied labour services may be for loading/unloading or unpacking the goods supplied by you. These labour services have been supplied to your customer and therefore, he would be eligible to take any credit of tax suffered by them on such labour services. Since the customer has raised the invoice regarding expenses incurred on labour, it derives that you had agreed to supply goods to the customer in unpacked condition at the place of delivery. Now, since the customer has raised the invoice regarding expenses incurred on labour, this amount (which includes the amount of IGST) which is payable by you is cost to you and you are required to pay IGST on this value in terms of section15(2)(b) of CGST Act. Pl understand that the customer has spent this amount on your behalf.
    You are not eligible to take credit of IGST on the basis of invoice issued by your customer, since he has not supplied any goods/service to you.
    however, i am of the view that your customer apparently cannot charge IGST from you. The tax paid by the customer to the supplier of labour services must be CGST (being local to the customer) and secondly, he can only raise invoice of the amount of charges paid to the supplier of labor plus the tax paid to such supplier which must be CGST as discussed above.
     
  4. hitler

    hitler New Member

    Respected Sir & Ma'am Firstly I apologize that I didn't mention that it was igst or cgst But i have got that customer has charged cgst then can I take the credit.
     
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