Payment to advocate--reverse chages mechanism

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Mohd Aijaz (Querist)
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21 March 2014 Dear Experts

Please let me know that if we pay to advocates for :-
(1) daily work as prepare salary, ESI PF etc, Sale tax returns etc for which amount paid on monthly basis under any contract or mutual understanding.

(2) Legal consultancy charges for any case.

Is service receiver is liable to pay service tax on both type of services received or only on consultancy charges paid for legal matter only.

CA. RAVIKUMAR

CA. RAVIKUMAR (Expert)
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21 March 2014 Hi Mohd Aijaz,

1) The services mentioned by you in the first question not a legal service hence the reverse charge is not applicable.

2) Yes taxable and reverse charge is applicable for Legal consultancy service provided in relation to advice, consultancy or assistance in any branch of law.

Exemption for the second question only if

a) service of appearance before any court of law or statutory authority

b) If service provider and service recipient is not a business entity.

c) Service Provided to business entity, advocate turnover up to rupees ten lakh in the preceding financial year is not taxable