I am appointed as CFO on contract basis (or Retainer) in hospital instead of as employee on Fixed Monthly Amount. Do I need to pay GST. What is TDS rate and section company should deduct taxes. Also my attendance are marked. I am eligible for 24 days leave
From India
From India
It is understood that you are not a retainer but an employee only. Even though your employment is for a fixed term, you will be covered by all the rules and regulations concerning employment of persons. A retainer is a person whose expert advise is taken as and when required. He will not regularly attend to the office but he visits the office only when his presence i required in the office. He will never ask for leave, and will never follow the office timing. The fee paid is called retainer fee,and that will come under the head of Professional fee. This is a service and he can issue an invoice which may include GST. Since you have been allotted leaves, your status is not as Consultant/ Retainer but an employee.
The question of GST will not arise in your case because your relationship with the company is that of employee and employer. Being an employee your remuneration should be subjected to tax deduction at source under the head "Salaries" only. The TDS should be made as per section 192 and not u/s 194J. 194J is applicable for professionals whereas the former is applicable for employees, It s worth referring Wockhardt Hospitals Limited, ... vs Department Of Income Tax in which it was observed that the remuneration paid to doctors appointed as consultants was chargeable to tax under the head 'salaries' and liable for deduction of tax u/s. 192 of the Act not under the provisions of section 194J of the Act.
From India, Kannur
4249The question of GST will not arise in your case because your relationship with the company is that of employee and employer. Being an employee your remuneration should be subjected to tax deduction at source under the head "Salaries" only. The TDS should be made as per section 192 and not u/s 194J. 194J is applicable for professionals whereas the former is applicable for employees, It s worth referring Wockhardt Hospitals Limited, ... vs Department Of Income Tax in which it was observed that the remuneration paid to doctors appointed as consultants was chargeable to tax under the head 'salaries' and liable for deduction of tax u/s. 192 of the Act not under the provisions of section 194J of the Act.
From India, Kannur
I agree with the observations of Madhuji. No doubt it's a 'tenure' post with separate terms & conditions. But as he is CFO on a regular basis requiring his attendance like any other employee it's only appropriate to treat his status as 'employee' drawing salary. TDS also will be like salary only. No GST involved.
From India, Bangalore
From India, Bangalore
Hi,
One small observation.
The Member who had raised this question claims that he is appointed as a Chief Financial Officer (CFO) in a hospital. But question raised was very trivial related to TDS and GST which a person his stature should be familiar with very much. Looks strange !
Many employers follow the concept of consultant retainer contract to avoid statutory requirements and even the employees prefer the same as their take home salary will be more compared to regular employment.
From India, Madras
One small observation.
The Member who had raised this question claims that he is appointed as a Chief Financial Officer (CFO) in a hospital. But question raised was very trivial related to TDS and GST which a person his stature should be familiar with very much. Looks strange !
Many employers follow the concept of consultant retainer contract to avoid statutory requirements and even the employees prefer the same as their take home salary will be more compared to regular employment.
From India, Madras
Yes, being a person heading the Accounts/ Finance department, he should know the difference between employment and professional consultancy and deduction of tax as per section 192 and 194J etc.
From India, Kannur
From India, Kannur
Mr. Kaushal,
It is indeed surprising that you are asking accounting questions on an HR platform, when you are supposed to be a CFO. Is your question related to whether you are a contractor or an employee? If so, please ask the question more clearly.
Anyway, to answer your question, if you are raising an invoice on the employer every month, then you will have to register for GST and pay it if your 'turnover' from all engagements crosses ₹ 20 lakhs in a year (₹ 10 lakhs for 7 northern states). TDS will be deducted from your invoice by the employer at 10% as it will be classified as professional fees.
But if you are CFO and do not know this, I would be worried for the employer...
From India, Mumbai
It is indeed surprising that you are asking accounting questions on an HR platform, when you are supposed to be a CFO. Is your question related to whether you are a contractor or an employee? If so, please ask the question more clearly.
Anyway, to answer your question, if you are raising an invoice on the employer every month, then you will have to register for GST and pay it if your 'turnover' from all engagements crosses ₹ 20 lakhs in a year (₹ 10 lakhs for 7 northern states). TDS will be deducted from your invoice by the employer at 10% as it will be classified as professional fees.
But if you are CFO and do not know this, I would be worried for the employer...
From India, Mumbai
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
GST TDS Non Deposit Letter.docx
GST applicability on liquidated damages, compensation and penalty arising out of breach of contr.pdf