Pradeep Jain - Chartered Accountant

I am consultant engaged in filing of EPF, TDS, ROC filing and other compulsory forms required to be filled under Companies as well Income Tax Act. While filing forms, Government charges GST on the fees paid to them. So, while billing to the client, I levy GST on the consultancy charges including the fees and GST charged by the government on fees paid. Is this the correct method of charging the GST?

Ans- To make it simpler, for eg while making roc fees payment to government on behalf of client, the government charges 1000Rs+GST @ applicable taxes. So, the invoice raised to client by you includes the consultancy say Rs. 500 + {1000+ GST paid on the government} and on this wholesome figure, you charge GST @ 18%. In this scenario, you are unduly increasing the cost of client by charging tax on the GST paid to government along with the fees. The client has authorised you to incur expenditure of his behalf for making the payment of fees to the government. In this scenario, expenses incurred i.e. 1000+GST paid to Government should not form part of value of consultancy services. Pure agent is one who while making supply to the recipient also incurs and receives expenditure on the supply made on behalf of principal(Rule 33 of the CGST Rules,2017). The correct method of raising the invoice is charging GST only on consultancy charges @ 18% and fees paid along with GST should be reimbursed from the client without any additional tax payment.

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