Summary at the end, feel free to scroll down directly. I am an individual consultant. I would like to understand if I have to pay GST for some invoices raised (and money received) before GST registration date. Further, if services were rendered in fy 2019 but invoice was raised in fy 2020 due to issues on my client side, should I pay GST?
Further, on what amount should I pay 18% GST – on invoice amount raised or the amount received from client after client cut 10% TDS?
(mine is a case of IGST)
Last year, I provided consulting services from Aug 2019. Based on advice from a CA friend, I registered for GST and got the certificate. but afterwards I learnt GST was not required if FY earnings is less than 20 lacs. Since I was planning to immigrate to another country in February and since my total earnings for FY 2019-20 was going to be less than 20 Lacs, I decided to cancel GST registration. This was processed and approved by Govt.
So I raised invoice 1 at the end of month 2 (ie for period aug-oct) and got paid in Nov. I raised next invoice2 for month 3 by end of Nov and got paid in Dec. After this I got busy and didn’t raise invoice for the next few months. I’m new to invoice raising and consulting and I trusted the client so ended up delaying in the process. Anyway, around Feb 2020 due to Covid 19, my abroad opportunity got put on hold. Around this time since I had earned about 18 lacs, and since I would continue staying in the country due to plan change, I decided to re-register for GST which got approved in early march.
Now I raised invoice 3 in March for period nov-Feb. Client asked me to wait since they were renewing contract with their payment partner. So by the time they fixed the issue, it was Apr. So I raised the invoice 3 again in april and got paid in apr for Nov-Feb.
Now I want to raise next invoice for Mar- present but client has new issue – they had to renew the contract with me in Febraury. They told me it was done. But now they say it is stuck with bank and due to lockdown, it is taking time. I have no worry since client will eventually pay me. Just sharing this detail to clarify the reason for gaps in invoicing.
Summary of information:
- Consulting services started: Aug 2019. Agreed amount was 6.1 lacs per month all inclusive
- Registered for GST in august but later applied for cancelation due to abroad immigration plans. Cancellation was accepted by Govt)
- Invoice-1 raised in Oct 2019 for Aug to Sep services (12.2 lacs) (No GST involved since I cancelled GST certificate by this point)
- Invoice-2 raised in Nov for October services (6.1 lacs). Total 2019 income was less than 20 Lacs at this point.
- Feb – C19 paused my abroad move so re-did GST registration in Mar 2020
- Raised invoice3 (nov-feb) in Mar (with GST number) but client delayed due to issues on their side
- Re-raised Invoice-3 (for nov-feb) in Apr. Income crossed 20 Lacs at this point.
- New issue on client side so waiting to raise invoice 4 for Mar – present
- Should I pay GST for first 20 lacs earned in FY 2019-20 (ie for Aug-Nov)?
- When I pay GST via GST portal, should I calculate 18% on monthly 6.1 lacs or 5.49 lacs that i received after client cut 10% TDS
- Should I pay GST on Nov-Feb income since the invoice raising and payment happened in new FY?
- what form type to use on GST portal
If you are not registered for GST your invoice must not say Tax Invoice and just say Invoice. You do not charge an extra 10% on top of your services, that you collect and pay onto the government and you cannot claim the GST paid on items you buy.