Clarification on gst

161 views 9 replies

Guest

I want to clarify one thing about GST pertaining to contracting staff. Consider this example.

Suppose we have 10 staff on contract with gross salary of 100000 per month. Your service charges are 15% per month. End of first month, you would raise invoice for 15000 and charge 18% GST ie 900 on this, am I right?

Or, you will raise invoice of 115000 and charge 18% GST ie 20700. I want to clarify this confusion.

Awaiting your response.

Replies (9)

Sarath Rajendran

Nil

2791 Points Joined November 2017

Gst is applied on the amount of invoice actually raised

A B Kundu

Professional

1427 Points Joined August 2012

You are requested to little elaborate the matter like what type of transactions you are entering into or whether you are the supplier of servie or recipient or what are the arrangements...

Guest

We are receipent of service i e Staff on contact basis on our store.

Vinod Babu

24196 Points Joined May 2018

In my understanding Mr Ratan is asking whether salary amount +services charges 15% has to be taken or only salary amount has to be taken for raising gst bill.

I want clarification for one thing, services charges @ 15% is charged by you. If yes you can take salary amount + services charges 15% for raising gst bill.

Guest

I want to clarify one thing about GST pertaining to contracting staff. Consider this example.

Suppose we have 10 staff on contract basis with gross salary of 100000 per month. Contractor (Service provider) service charges are 15% per month. End of first month, contractor would raise invoice for 15000 service charge plus 18% GST only sercive charges (excluding salary amountt) ie 900 on this, am I right?

Or, contractor will raise invoice of 115000 and charge 18% GST on full bill ie 20700. I want to clarify this confusion

Guest

Originally posted by : A B Kundu
	You are requested to little elaborate the matter like what type of transactions you are entering into or whether you are the supplier of servie or recipient or what are the arrangements...

I want to clarify one thing about GST pertaining to contracting staff. Consider this example.

Or, contractor will raise invoice of 115000 and charge 18% GST on full bill ie 20700. I want to clarify this confusion

Vinod Babu

24196 Points Joined May 2018

How do you get service charge is 900. Please explain.

Guest

Salary Amount on contact basis staff - 100000

Agency Service charges- 15000 (i e 15% on 100000)

Total Bill Amount is 115000. now you tell me GST amount with reason

A B Kundu

Professional

1427 Points Joined August 2012

What I have understood is the supplier is providing manpower to you and against that you are supposed to pay the consideration (Staff Salary + Service Charges).

If you pay directly to the staffs in that case it can be said that you have made salary expenses and upon this no GST shall be levied.

But, if you pay the staffs indirectly,i.e., First paying to the supplier & then supplier will pay to the staffs, in that case it won't be treated as Salary expenses as the whole money you are paying to the Supplier, which will be treated as Service Charges fully, hence GST to be levied on full amount.

This is my opinion, hope you have understood. Other experts' comments are solicited.