Consultancy fees taxable or not

Consultancy fees taxable or not

I am consultant providing consultancy services related to shares, IEPF, conversion of physical shares to demat etc.
1. Is GST applicable on me?
2. What is the threshold limit for service provider in West Bengal ?
3. Do I have any option to tax lower than 18 % . I provide interstate service but I am not able to charge my clients GST and will have to pay from own pocket.
4. What are the sources from where I claim ITC as I don't incur and purchases for my services?

Asked 4 months ago in GST

If your turnover exceeds rs 20 lakhs, then GST us applicable . You can go for composition Scheme, but then h wo t be able to take GST credit

Vidya Jain

CA, Kolkata

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GST Applicability: Yes, GST is applicable on consultancy services, including services related to shares, IEPF (Investor Education and Protection Fund), conversion of physical shares to demat, etc.

Threshold Limit for Service Providers in West Bengal: As per the GST regulations, the threshold limit for service providers is ₹20 lakhs in most states, including West Bengal. If your aggregate turnover exceeds this limit, you are required to register for GST.

Lower Tax Options: Unfortunately, the standard GST rate for consultancy services is 18%, and there are no provisions to tax consultancy services at a lower rate under the current GST regime. If you are providing interstate services, you must charge GST unless you opt for the Composition Scheme, which is not typically applicable for service providers except for certain specified service sectors.

Input Tax Credit (ITC) for Consultancy Services: As a consultant, you can claim ITC on the GST paid on various business expenses. While you may not have direct purchases related to your services, here are some common expenses on which you can claim ITC:
- Office rent
- Professional fees (e.g., legal, accounting services)
- Office supplies and equipment
- Internet and communication services
- Travel expenses for business purposes
- Software and digital services subscriptions
- Maintenance and repair services for office equipment

To claim ITC, ensure you have valid tax invoices or receipts for these expenses and that they are directly related to your business operations.

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