The Center has been encouraged by the consulting and services industry to review the Goods and Services Tax (GST) collection regime.
The service industry and consultants now pay their taxes as responsible professionals and businesses and are absolutely upset by the requirement to deposit GST on an accrual and due basis. According to K.K. Kapila, a former president of the Consulting Engineers Association of India (CEAI) and former co-chair of the FICCI Infra committee, the GST must be deposited within 30 days of the invoice’s issuance rather than when it is received from the client or customer.
Consulting engineering firms operate in the service industry and are completely reliant on timely receipt from customers to be in business.
According to him, banks are hesitant to lend money to professionals and are generally opposed to supporting the payment or deposit of income tax and the GST.
The financial status of these organizations is negatively impacted by a late receipt from customers, which causes delays in the GST deposit. Threats of termination of the GST registration and/or legal action, etc. result from any delay in the GST deposit. This is true even if the service sector, which has a constrained liquidity issue, pays interest on delayed GST deposits.
Otherwise, the service provider can be allowed a 180-day window from the time the invoice is raised to deposit the GST, in accordance with the receipt of payments from the customer, he added.
The client could be required to pay the provider with GST and send a copy to the relevant GST office.
