I work as a consultant providing research services for a US based company (actually a University). Please answer the following questions. 1) Someone told me that a service agreement is required for statutory compliances. I asked the Company for a service agreement. They asked me to provide a definition of a service agreement based on the requirements in our country. Can you please tell me what exactly the contents of a service agreement should be? 2) Isn't service agreement a standard terminology that the corresponding authority in the US Company should be aware of what the content should be? 3) I guess I need to do GST registration (with zero rate applicable to me) as the amount that will be paid to me may cross 20 Lakhs per annum. Do I need a service agreement while doing GST registration (LUT etc.)?
Hi
A service agreement is a term used for the general contract between both the parties including all details of the engagement mainly including the terms of engagement, obligations of both parties, termination clause, taxation, IPRs, indemnification etc.
Yes, you need to register under GST. No, service agreement won't be required for GST registration.
We may discuss the issues further.
1) You can get the format of service agreement from net.
2) You do not need it for GST registration or LUT.
You are working as an independent consultant to that company there is no such compulsory requirement of service agreement you can issue your invoice and get money from them.
No it is a very general term and not a specific or mandatory thing.
Yes you should register under GST. No there is no requirement of agreemnt for GST registration.
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Thank you.
Hello,
The Service Agreement will should out the exact nature scope of work, terms and termination details, taxation and dispute resolution mechanisms, general provisions.
Yes, GST registration would be necessary. For GST registration, the service agreement won't be required.
I hope this answer satisfies your requirements.
Regards,
CA Hunny Badlani
Hi
Major elements of the consultancy agreement are :
Consultancy agreement benefits both the company and the consultant. It covers all the aspects related to the tasks to be performed within said timelines. The agreement helps to avoid misunderstandings on the part of both the consultant and the company. It also serves as a legal document in the event of any dispute between the consultant and the company.
Yes you should get gst registration.
There is no specific requirements for service agreement
Dear Sir,
Hope you are doing well !!
1. You can get the format of service agreement online.
2. No, you don't required service agreement while doing GST registration (LUT etc.)
I work as a consultant providing research services for a US based company (actually a University). 1) The amount I will be paid to me might exceed 20 Lakh before this FY end (March 31, 2021). However, can I carry forward the tax liability to next year (by delaying invoices and hence the payment ensuring the amount paid is less than 20 Lakh) so that I can register and file GST only from next FY onwards? 2) I usually raise invoices once in two months instead of every month. Can it be compatible with filing GST returns? That is, should/can I still file GST returns monthly?
Dear Sir,
Hope you are doing well !!
1. We need to discuss the same over call.
2.Currently, the businesses and traders having an annual aggregate turnover in excess of Rs. 1.5 crores are required to mandatorily file monthly GSTR 1 (Return for Outward Supplies) and GSTR 3B (Consolidated Return of Outward & Inward Supplies).
With effect from 01.01.2021, those with an annual turnover of less than Rs 5 crore will have the option of filing quarterly returns, but will need to pay taxes on a monthly basis. Those with an annual turnover of over Rs 5 crore will need to file monthly returns.
We may assist you in GST compliances over call in detail.
It is advisable to take a phone consultation for detailed discussion.
1. Service agreement is a conclusive evidence about your revenue generation and dispute resolution. As you are involved in providing services to overseas clients, it is advisable to sign a service agreement. Service agreement like contract of employment contains terms and conditions in respect to nature of service, basis of remuneration, service termination clause, payments clause, liability clause etc.
2. In US it may be called professional contract.
3. You do not need service agreement for GST registration but it will support your revenue claim in support of invoices.
4. services provided by you is treated as export of services which is zero-rated. You can opt for GST without payment of taxes by filing LUT. You can only defer GST registration but it does not impact much as there will be no GST liability. For filing of GST returns, you can take the assistance of CA.
5. Once you have obtained the GST registration then it is mandatory to file GST returns irrespective of any transaction during a month.
Hi
Under GST, the time of supply of services is earliest of:
1. Date of issue of invoice
2. Date of receipt of advance/ payment.
3. Date of provision of services (if invoice is not issued within prescribed period)
Invoices have to be issued within 30 days of provision of services.
Depending upon the above criteria, income recognition could be decided. Further, ensure that the same income is shown in GST as well as Income tax returns.
We may discuss the issues in detail over a phone consultation so that an appropriate course of action can be taken.