Applicability & registration of gst

This query is : Resolved

Gopal Garg (Querist)
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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.

Please guide.

Gopal Garg

Gopal Garg (Querist)
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24 May 2017 Dear Experts,
Please advise in the matter.
Regards

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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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.

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