Rcm
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
28 May 2018
Sir,
I am paying monthly amount as consultant to one of employee and deducting TDS, is this transaction attract GST under RCM ? Please answer..
I am paying monthly amount as consultant to one of employee and deducting TDS, is this transaction attract GST under RCM ? Please answer..
CA Suresh Jain
(Expert)
28 May 2018
He can either be an employee or a consultant. If he is a consultant and not registered under GST, presently upto 30th June you are not required to pay GST on RCM basis. But, for such payments made by you upto 12.10.2017 RCM was applicable.
20 July 2025
1. Is consultancy fee paid to employee taxable under GST?
If the person providing consultancy is your employee, then typically, this is part of salary/remuneration.
Salary payments are not subject to GST.
2. What if employee is providing consultancy as an independent contractor?
If this person is a consultant engaged as an independent service provider (not an employee), then consultancy fees are subject to GST.
If the consultant is registered under GST and charges GST on invoice, you pay GST to them.
If the consultant is unregistered or located outside your state, and the service is covered under RCM, you might have to pay GST under RCM.
3. Does this attract RCM?
If the consultant is registered and raises invoice with GST, no RCM.
If the consultant is unregistered, then yes, RCM applies (section 9(4) and 9(3) GST Act), and you as recipient pay GST on reverse charge.
However, if the service is received from your own employee as a salary, no GST or RCM applies.
If the person providing consultancy is your employee, then typically, this is part of salary/remuneration.
Salary payments are not subject to GST.
2. What if employee is providing consultancy as an independent contractor?
If this person is a consultant engaged as an independent service provider (not an employee), then consultancy fees are subject to GST.
If the consultant is registered under GST and charges GST on invoice, you pay GST to them.
If the consultant is unregistered or located outside your state, and the service is covered under RCM, you might have to pay GST under RCM.
3. Does this attract RCM?
If the consultant is registered and raises invoice with GST, no RCM.
If the consultant is unregistered, then yes, RCM applies (section 9(4) and 9(3) GST Act), and you as recipient pay GST on reverse charge.
However, if the service is received from your own employee as a salary, no GST or RCM applies.
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