Question ID : 36875

WORKS CONTRACT

Dear Sir, We are in the business of Erection and Installation of Prefabricated Building i.e Shades for Factories. The resultant item is immovable property and is covered under works contract. We get contract from all over India.We donot have any fixed establishment at that site. The work flow is such that we give sub contract for erection to contract who takes his staff and erects the building and our staff goes on monthly basis for inspection.All our equipments are kept at the party site in one room which is allotted to us. My query is whether we have to take registration in every state where we get workcontract. As we are billing from rajasthan and charging IGST in interstate transactions. please guide

Answer ID : 76022

it is not mandatory to get registered in every state in the circumstance you mentioned but there is a problem of availing ITC if you take services or buy goods locally from the particular state.

Answer ID : 76023

it is not mandatory to get registered in every state in the circumstance you mentioned but there is a problem of availing ITC if you take services or buy goods locally from the particular state.

Answer ID : 76051

No, there is no requirement to register in every State. As you have examined that no fixed establishment (FE) is created, you can carry out these projects as inter-State supply. Caution - please it is feasible to avail all inward supplies for each project also as inter-State supplies. This will ensure that credit are optimized and there is no scope for any query regarding FE being created through the sub-contracting process. I would like to use thumb-rule, that if site-work takes more than 12 months, then high possibility that FE is created. Please recheck that FE not created directly or indirectly.

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