Consultancy and support services aren’t composite supply in GST

Consultancy and support services have become an essential part of businesses worldwide. With the advent of GST, there have been many changes in the way these services are taxed. One such change is the treatment of consultancy and support services as a separate supply under GST. In this article, we will discuss why consultancy and support services are not considered a composite supply in GST.

What is composite supply under GST?

A composite supply is a supply made up of two or more goods or services that are naturally bundled and supplied in conjunction with each other. For example, a package deal that includes a hotel stay and breakfast is a composite supply as the two services are naturally bundled together.

Why aren’t consultancy and support services considered as composite supply under GST?

Consultancy and support services are not considered composite supply under GST as they are not naturally bundled with any other goods or services. These services are provided separately and are not dependent on any other supply.

What is the impact of this change in GST?

The change in GST has resulted in the taxation of consultancy and support services separately. This means that these services are taxed at the applicable rate of GST, which is currently 18 percent. Businesses that provide these services must register for GST and comply with all the necessary rules and regulations.

What are the benefits of this change in GST?

The change in GST has several benefits for businesses that provide consultancy and support services. By being taxed separately, their services are now recognized as a legitimate business activity. This has helped to eliminate the perception that consultancy and support services are a part of the informal sector.

Additionally, this change has led to greater transparency in the taxation of these services. Businesses that provide these services can now claim input tax credits on the GST paid on their purchases. This has helped to reduce the overall tax burden on these businesses.

Conclusion

Consultancy and support services are an essential part of any business. With the implementation of GST, the taxation of these services has undergone a significant change. By treating these services as a separate supply, businesses that provide them can operate more transparently and efficiently. As GST continues to evolve, it is essential that businesses stay up-to-date with any changes to the tax laws that may affect them.