Gst on legal services.

This query is : Resolved

Neev Garg (Querist)
Follow

25 October 2023 I know that gst on legal services is collected from business as in case of reverse charge mechanism when the advocate firm has not registered but If the business availing legal services is also not registered then no one will pay gst am I right ? and why gst on transfer of FSI index is collected from promoter what is logic behind this ?

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
Follow

15 January 2024 If both the service provider (advocate) and the recipient (business availing legal services) are not registered under GST, then no GST would be applicable in this scenario.

The GST on the transfer of FSI or development rights is generally applicable to the promoter or the builder/developer, not the ultimate buyer. The logic behind this is to bring clarity to the tax liability and collection process.

Promoters who transfer development rights or FSI often do so as part of the real estate development process. The transfer of such rights is considered a taxable supply under GST. The promoter, being the supplier of the service, is liable to pay GST on the consideration received for such transactions.

The logic behind taxing the promoter is to streamline the taxation process, making it easier to administer and collect taxes from a defined set of entities involved in real estate transactions.