Ficci urges FinMin to re-look into GST regime for consulting, service sector

Industry body Ficci Thursday urged the Finance Ministry to have a re-look at Goods and Service Tax (GST) regime for consulting and service sector.

"Ficci's National Committee on Transport Infrastructure and the Consulting Engineers Association of India (CEAI) has urged the Union Ministry of Finance to have a re-look at its Goods and Service Tax collection regime for Consulting and service providing sector and urged to put the onus of depositing of Goods and service tax on the Client (Service Receiver) including both the government and Private sector," it said in a statement.

At present, the consulting and service community which provides service to the government and private sector is being coerced into payment of GST on behalf of the employer, whereas, their role is that of a mere collector of tax on behalf of the government, the industry body said.

"Ficci Infra Committee and CEAI on various occasions have written to ... Minister of Finance and to GST Council that the GST payable by the employer of consultant and service sector should be collected by Government directly from the employer or service receiver.

"At present, the Consulting community continues to be made liable for payment of GST on behalf of the employer, even before the consultants receive their remuneration from the employer," K K Kapila, Co-Chairperson, Ficci Infra Committee and Chairman advisory committee CEAI, said.

This practise places an enormous burden on the service providers, as most of the service seekers are various government departments...where payment invariably gets delayed, many times 4-6 months and even beyond a year in a few cases, Kapila said.

"This effects the cash flow of service providers and many have become defaulters in settling the GST dues for no other reason but due to lack of resources, as the payment is being sought even before receipt of the money for the services rendered," Kapila added.