I am Ph.D holder in Science with having more than 20 years of Experience in this field and now rendering Technical advice and sample testing for my US based client by digital mode of communication, means I am exporting all my services. I have my independent GST number with LUT scheme. I am receiving samples from US and tested at my own lab and submitting reports to US based client. I am arranging some of tests from third party lab from India and reimburse expenses from my client exactly same amount as external lab charged to me, also generating separate invoice for expenses incurred on behalf of client. In this way my total receiving exceeding the limit of 75 lacs. I have filed my GST return on Gross receiving basis, while my actual professional receiving (after deducting expenses) is less than 75 lacs. Now please suggest me in which scheme I should file my ITR, whether it should be in 44AD or 44 ADA? Please explain in detail as there are lot of confusion.
- 44ADA would be applicable as you were providing technical services
- Gross turnover excluding reimbursement of expenses would be considered as there is no net surplus in the reimbursement account. Also you have generated separate invoice for the reimbursement of expenses instead of the consolidated invoice
- Under GST, gross turnover should be excluding reimbursement of expenses on the basis of pure agent concept
For detailed discussion you may opt for phone consultation
Section 44AD:
Section 44ADA:
Your Scenario:
Best regards,
For detailed, personalized advice, consider a phone consultancy.
Hope you find the information helpful. You are free to contact me for further discussion.If you could spare two minutes of your time to write a review, It would be really grateful and very happy to read it.
Thank you.
Shubham Goyal
I appreciate response of Mr. Vivek Kumar Arora, I have a follow up question, as I have already filed my GST return on Gross Receipts (including reimbursed expenses) from foreign client under LUT, so there is no GST liability on me. As I have mentioned in my earlier question, I have issued separate invoice for expenses incurred on behalf of client. Please consider that my Gross receipt is above 75 lakhs from foreign client and after deducting reimbursed expenses, it comes much less than 75 lakhs, while my GST return has been filed on above 75 lacs receiving (gross receipts), so keeping in view all these facts is it correct to file ITR under section 44 ADA with a consideration of gross receipts minus reimbursed expenses, which is less than 75 lacs? Please suggest.
- U/s 44ADA, you can show gross receipts excluding reimbursement of expenses. Prepare reconciliation statement for difference of gross receipts between GST and Income tax.
- Consider foreign exchange differences in the ITR
Calculate Professional Income:
Prepare Reconciliation Statement:
File ITR under Section 44ADA:
Conclusion:
Given your scenario, it is correct to file your ITR under Section 44ADA, considering gross receipts minus reimbursed expenses. Ensure proper documentation and reconciliation for any discrepancies between your GST returns and income tax returns.
Best regards,
For detailed, personalized advice, consider a phone consultancy.
Hope you find the information helpful. You are free to contact me for further discussion.If you could spare two minutes of your time to write a review, It would be really grateful and very happy to read it.
Thank you.
Shubham Goyal