A professional firm in Mumbai—law, chartered accountancy, consulting, architecture, engineering or medicine—supplies services taxable at 18% where the firm is registered and the recipient is in India. The threshold is ₹20 lakh for a service provider. The sector’s GST issues are the export documentation for foreign clients, the ITC on firm expenses, and the classification of bundled advisory offerings.
The 18% Rate and the Invoice
Professional services are taxable at 18%. The invoice should identify the service, the SAC, the period and the GSTIN of the recipient. A generic “professional services” description across legal, advisory and compliance work creates ambiguity if the credit is reviewed. Where the firm supplies to a registered business, the recipient’s ITC depends on the invoice being in its name with the correct GSTIN.
The Export of Professional Services
A firm serving foreign clients can qualify for zero-rated treatment if the five Section 2(6) conditions are satisfied. The firm should obtain a LUT, issue zero-rated invoices, maintain FIRC/bank realisation evidence and claim refund of accumulated ITC. The establishment condition is critical for firms billing foreign affiliates of Indian groups.
The ITC Discipline
The firm’s ITC on office rent, software, professional subscriptions, travel and equipment is eligible where the invoice is in the firm’s name and the expense is for the business. Section 17(5) blocks credit on certain items, including club memberships and personal consumption. The firm should maintain a vendor master with GSTIN status and a reversal register for blocked or personal items.
What the Consultant Does
The consultant assists with the export documentation, the ITC review, the invoice discipline and the notice response. The value is in the documentation architecture that supports the firm’s credit and export positions.
Call to Action: We advise Mumbai professional firms on export documentation, ITC discipline and notice defence. For a firm-specific review, contact office@anujdesaiassociates.com, Ph No. 9619456656, Website https://anujdesaiassociates.com, LinkedIn linkedin.com/in/ca-anuj-desai-122547230.