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Query Answer
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A civil work contractor in state of Telangana and he got another work at West Bengal. Now whether he is required to register in state of West Bengal. If he does not take the registration in WB then what will be limitations in input tax credit available to him. As he can make the IGST billing.

Reply

We should consider the following provisions for registration requirement—

Place of Supply—As per Section 12(3)(a) of IGST Act, 2017 in case of works contract services place of supply shall be the location at which the immovable property (construction site) is located.

So in your case place of supply is West Bengal.

Location of the supplier of service—As per section 2(15) of IGST Act, 2017, the term location of the supplier of services means:

(a) where a supply is made from a place of business for which the registration has been obtained, the location of such place of business;

(b) where a supply is made from a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establishment;

(c) where a supply is made from more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the provisions of the supply; and

(d) In absence of such places, the location of the usual place of residence of the supplier.

Thus, Location of supplier of service is depends on whether the works contractor is willing to have a fixed establishment in West Bengal or not, if there will be a fixed place of establishment,  then works contractor have to register in West Bengal.

After getting registered in West Bengal, the works contractor will supply such service as intra-state supply and charge CGST and SGST thereof.

Whereas if the works contractor is not willing to have a place of business in west Bengal, then he can provide such service as inter-state supply and has to charge IGST on the same.

Without taking registration in west Bengal, the works contractor will face issues such as— 

Movement of goods and machinery from Telangana to project site for construction work.

Authority for Advance Ruling, Rajasthan has ordered the following Ruling in the matter of JAIMIN ENGINEERING PRIVATE LIMITED

Ruling—While supplying services if the supplier of services (who is already registered in Gujarat) has place of business/ office in the state of Rajasthan (where works contract service are to be provided) then he is required to get himself registered in state of Rajasthan.

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