Does Consultancy Charges Attract GST?

GST (Goods and Services Tax) consultancy services in India is an essential aspect that one must understand as a professional, business person or a consultant. As a freelance consultant, a consultancy firm or a recipient of such services, the question; does consultancy charges attract GST is important.

It happens not only during such events as at Effizent Seele Pvt Ltd, but also on the regular basis one will get to know about the start of his/her GST Suvidha Kendra, updates and guidance on applicability of GST on professional services, such as consultancy.

Lets break it down in a simple way.

What is Considered as Consultancy?

Consultancy Services also known as Consultancy Services are permits of attendance and involvement of an individual or firm in the issue to provide expert advice or expertise in exchange of a fee. These may be in such areas as:

• Business Management

• IT & Software

• Legal and Financial Services

• Marketing & Advertising

• Human Resources

• Taxation or GST-related services

Intended here is consultancy which is regarded as a supply of service as per the GST system.

Is GST Applicable on Consultancy Charges?

The answer is yes and consultancy charges are subject to GST in the greater majority of the cases.

Any service where there is an amount received in exchange of a service (fee) is liable under the rules of GST Act unless exempted. Consultancy is not covered in the exempted list of services therefore it is subject to GST.

Key Points:

• Applicable GST Rate: 18%
  

• GST Type: CGST + SGST (for intra-state) or IGST (for inter-state)
  

• Threshold Limit: ?20 lakhs (?10 lakhs in special category states) for mandatory registration
  
  

Example Table: GST on Consultancy Charges

Who Needs to Pay GST on Consultancy?

You are liable to collect and pay GST if:

• You are a registered consultant under GST

• Your annual turnover exceeds the GST threshold

• You provide services to clients in other states or countries

• Youre supplying services through an online platform

If your turnover is below the limit and youre not voluntarily registered, GST is not mandatory.

Facts You Should Know

• Consultants must issue GST-compliant invoices.
  

• GST is payable on advance payments too.
  

• Reverse charge may apply if the recipient is located abroad.
  

• Input Tax Credit (ITC) can be claimed by GST-registered businesses.
  

• Export of consultancy services is zero-rated (with proper documentation).
  
  

Bullet Highlights for Easy Reference

• GST on consultancy is 18%

• Threshold: ?20 lakh for GST registration

• Registered consultants must file GST returns monthly/quarterly

• Export of consultancy = zero-rated under GST

• Reverse charge applies in certain cross-border transactions

How EffizentSeele Helps in GST and Consultancy Services

EffizentSeele Pvt. Ltd. is a trusted name for individuals and businesses looking to simplify GST services. Whether you want to:

• Understand if GST applies to your consultancy business
  

• Start your own GST Suvidha Kendra
  

• File consultancy-related GST returns
  

• Learn how to bill clients with GST

EffizentSeele offers expert support, training, and a ready-to-use dashboard for hassle-free GST compliance. Thousands of consultants have benefited from the clarity and ease EffizentSeele provides across India.

Frequently Asked Questions (FAQs)

Q1. What is the GST rate for consultancy services in India?
The standard GST rate for consultancy services is 18% (9% CGST + 9% SGST or 18% IGST).

Q2. Are all consultants required to register under GST?
Only if your annual turnover exceeds ?20 lakh (?10 lakh for North-Eastern states), or if you provide inter-state services.

Q3. Is GST applicable on international consultancy services?
International or export of consultancy is zero-rated under GST, subject to documentation.

Q4. Can I claim Input Tax Credit on expenses related to consultancy?
Yes, if you are a registered consultant, you can claim ITC on eligible purchases like software, equipment, internet, etc.

Q5. How do I issue a GST invoice as a consultant?
Include your GSTIN, invoice number, date, description of service, GST rate (18%), and total amount payable.

Final Thoughts

So, to answer the big question Yes, consultancy charges do attract GST. If you're a consultant or hiring consultancy services, its important to understand the compliance part, invoice structure, and tax obligations.

Whether youre already a consultant or planning to start your own consultancy services, EffizentSeele can be your partner in handling everything related to GST from registration and billing to return filing and client management.