MANAGEMENT CONSULTANT

Date of Introduction: 16.10.1998 vide Notification No.53/98-ST dt.07.10.1998.

Definition:

“Management Consultant” means any person who is engaged in providing any service, either directly or indirectly, in connection with the management of any organization in any manner and includes any person who renders any advice, consultancy or technical assistance, relating to conceptualizing, devising, development, modification, rectification or upgradation of any working system of any organization.

(Section 65(37) of Finance Act, 1994 as amended)

Taxable event and scope of service:

Taxable service means any service provided to a client, by a management consultant in connection with the management of any organization in any manner.

(Section 65(72) (r) of Finance Act, 1994 as amended)

Service rendered in respect of Merger and Acquisition is leviable to Service Tax under the category of Management Consultant upto 15.07.2001 thereafter the same is leviable to Service Tax under the category of banking and other financial services.

   (Ministry’s F.No.177/2/2001 CX-4 dt.27.06.2001)

The activities of rendering lectures/briefs/advise to the Management Association Members relate to upgradation of Human Resources of an organization and therefore these services attract Service Tax under the category of Management Consultant.

(Ref. Service Tax through Questions & Answers, 2000-2001)

Value of Taxable Service:

Value of the taxable service in relation to the service provided by a management consultant to a client, shall be the gross amount charged by such consultant from the client for services rendered in connection with the management of any organization in any manner.

(Section 67 of Finance Act, 1994 as amended)

Exemption/Exclusion:

1. If the management consultant renders any service to a client located abroad, the charges received by him for such consultancy service is not liable to service tax. However, if the management consultant has provided any consultancy service to a foreign company in India and received payment for such services, the same is liable to service tax.

2. Service rendered by practitioner of law, ESI, PF, etc. are in the nature of providing specialized professional assistance or secretarial assistance for filing various declarations/forms etc., maintenance of records etc. Such services do not make any change or improvement in the existing system of management of organizations. Such persons are not covered by management consultant.

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