GST Applicable only on Supervision Fees when Materials and Installation costs are Borne by Recipient: AAR

The AAR (Authority for Advance Rulings) recently ruled that GST is applicable only on supervision fees when the recipient covers the costs of materials and installation. The ruling clarifies that if a contractor's invoice includes separate charges for materials, installation, and supervision, GST should be levied only on the supervision charges. The cost of materials and installation, being borne by the recipient, is not subject to GST. This decision provides clarity on GST treatment in cases where the contractor's role is limited to supervising the work while the recipient handles other expenses.