22 May 2017
I am Financial Consultant( an Masters in Finance), currently working on monthly contract basis for fixed monthly contracted service charges of 90K(-) TDS for an Indian entity.I work from my Home for my principal. Such type of Contract is not permanent and I may switch to regular Job upon having better opportunity. Being under this contractual assignment,...
My query is:
01 Am I Required to obtain GST Registration if I continue to work for my present principal even after GST rolls out ?
02 Currently I submit my monthly Bill and receive payment after deduction of TDS. What shall be status of my charging the Service Charges and receipt of payment.
I need guidance as I have to submit certification to my principal to process my renewal.
14 July 2024
Based on the details provided regarding your contractual arrangement as a Financial Consultant, here’s the guidance on the applicability of GST registration and the status of your service charges and payments:
### GST Registration Requirement:
1. **Applicability of GST Registration:** - As a Financial Consultant providing services to an Indian entity, GST registration may be required under the following conditions: - **Threshold Limit:** If your aggregate turnover of taxable services exceeds Rs. 20 lakhs (Rs. 10 lakhs for special category states) in a financial year, GST registration is mandatory. - **Interstate Supply:** Regardless of turnover, if you provide services from one state to another (e.g., if your client is in a different state than your place of residence), GST registration is mandatory.
2. **Your Situation:** - Since you are providing services on a monthly contract basis for a fixed fee of 90K (minus TDS), if your aggregate turnover exceeds the threshold limit or if your services are interstate, you would need to obtain GST registration. - Even if you currently do not exceed the threshold, it's advisable to monitor your turnover regularly, especially as GST rules may change over time.
### Status of Service Charges and Payment:
1. **Charging Service Charges:** - You should continue to invoice your client for the fixed monthly service charges of 90K (minus TDS). - Ensure that your invoices comply with GST requirements (if applicable), including details such as GSTIN (if registered), HSN/SAC codes, and other necessary information.
2. **Receipt of Payment:** - Your client currently deducts TDS from your payments. Under GST, TDS (Tax Deducted at Source) is separate from GST. - TDS deduction will continue as per income tax rules, and you will receive net payments after TDS deduction.
### Guidance for Certification:
- To process your renewal or certification with your principal, ensure that you communicate your GST registration status clearly: - If registered: Provide your GSTIN and comply with GST invoicing requirements. - If not registered: Clarify your exemption status (if applicable) or readiness to register if the turnover exceeds the threshold.
### Next Steps:
- **Monitor Turnover:** Regularly assess whether your turnover exceeds the GST threshold to determine if registration becomes mandatory. - **Consultation:** For specific advice tailored to your circumstances and to ensure compliance with GST regulations, consider consulting with a tax advisor or GST consultant.
By proactively addressing GST requirements and maintaining clear communication with your client, you can ensure smooth continuation of your contractual arrangement.
CAclubindia
