GST on consultancy services

[Mahadevan TV]

Dear Sir/Madam

I propose to take up a job (after retirement) as a consultant to an insurance broker. I will be getting a fixed salary and also variable pay depending on the business I bring in. What are the GST implications for me in this profile. Do I need to register for GST and file returns ?

Would be obliged if you can advise in details since I dont have knowledge about GST rules.

[KASTURI SETHI]

Consultancy is a taxable service under GST. Threshold exemption of Rs.twent lakhs is admissible to you. It depends upon the terms and conditions of appointment letter to ascertain whether you are an employee or not.

[Mahadevan TV]

Thank you Mr.Kasturi Sethi for your reply. The appointment is as a "consultant " to provide advisory services. The word "employee" is not mentioned.

[Surabhi Parihar]

Dear Sir,

Considering that your terms of service are not covered in the capacity of an employee, in that case you would be treated as an individual service provider for rendering consultancy services @18%. However, any service provided till a turnover of ₹ 20 Lakhs would be exempted from GST. Whereas, post crossing the turnover limit you would be liable to discharge liability at the given rate and make due compliance under law.

[Mahadevan TV]

Thanks Ms.Surabhi for guidance.

[Ganeshan Kalyani]

A consultancy service is a taxable service. GST is applicable if the turnover crosses the threshold limit of twenty lakhs.

AI Summary

GST on consultancy services requires registration and filing once turnover exceeds the statutory threshold; tax applies to non-employee consultants. Consultancy services supplied by an individual who is not an employee are taxable under GST at the applicable rate; a turnover-based threshold exemption delays registration and tax liability until the statutory registration threshold is exceeded, after which the consultant must register, charge GST on services, file returns, and discharge tax obligations. The employment-versus-consultant status is to be determined from the appointment terms and factual relationship.