Page 22 - Ch8_ EXEMPTION

13. Exemptions relating to Construction Sector:-

CCP 08.13.23.00
Mr. X, being a contractor, undertaken construction work of an individual residential unit otherwise
than as part of a residential complex. You are required to answer:- [RTP 2018]
1. Whether Mr. X is liable to pay GST where he undertaken pure labour contract?
2. Whether Mr. X is liable to pay GST where he undertaken both labour and material contract (GST Rate

= 12%)?
3. Mr. X gives contract to a sub-contractor. Can sub-contractor also get exemption if it is pure labour
contract?
Answer:-

Legal Provision:-
Ü Services by way of pure labour contracts of construction, erection, commissioning, or installation of
original works pertaining to a single residential unit otherwise than as a part of a residential complex are
exempt from GST.
Discussion & Conclusion:-

1. Since, Mr. X has undertaken pure labour contracts of construction of single residential unit otherwise than
as part of a residential complex, it is exempt from GST.
2. If Mr. X is providing service with both labour and material i.e. termed as works contract under GST, then

exemption is not available & he will be charged 12% GST.
3. Yes. Services provided by a sub-contractor to a contractor are also exempt as he is providing only labour
for the construction of residential house.

14. Combined Questions on Different Exemptions:-

CCP 08.14.24.00
Examine whether GST is payable in the following independent supply of services:-

(I) Indiana Engineering College, a recognised educational institution, has conducted an entrance test
examination for various courses run by it and charged entrance fees from the applicants.
(ii) Ram, an agriculturist, has stored sugarcane in a warehouse. He has taken fumigation services in the
said warehouse from Gupta Pest Control Co. for which he paid the consideration of ₹ 6,000.
(iii)“Smart Kids” is a Play School located in Delhi. Smart Kids has outsourced the catering services for

supply of food and drink in the canteen of Play School to BTV Caterers, Delhi for a consideration of ₹
8,00,000 per annum
(iv) Wellness Hospital, a clinical establishment located in Tirupati, is specialised in diabetic treatment.
The hospital has its own canteen – Tasty Foods. The canteen serves the food and drink to the in-

patients as advised by the doctors/nutritionists of the hospital. Apart from this, other patients
(who are not admitted) or attendants or visitors of the in-patients also take food and drink from
the canteen. [Study Mat (Similar)] [CA Inter MTP Mar 23 (Similar)] [CA Inter RTP May 19
New] [Study Mat]
Answer:-

(i) Legal Provision:-
Ü Services provided by an educational institution by way of conduct of entrance examination against
consideration in form of entrance fee are exempt from GST.

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