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RCM on legal services

17 April 2019

Please clarify, a business entity, registered in GST , having turnover of 8 lacks in preceding financial year taken legal services from advocate...

Will he have to pay RCM?

if possible,Please provide reference of GST law also

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5 Replies

Pankaj Rawat (GST Practitioner) (55057 Points)
Replied 17 April 2019

Yes , As per Section 24 of CGST Act , person availing services which are under RCM is liable to Obtain Registration mandatory. Hence RCM is to be done

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sagar kumar jha (student) (20 Points)
Replied 18 April 2019

But I have read somewhere that the The Government vide notification 12/2017 – Central Tax (Rate) dated 28.06.2017, has provided that GST would be applicable on reverse charge basis for the following services:

A partnership firm of advocates or an individual as an advocate, other than a senior advocate, by way of legal services to –An advocate or partnership firm of advocates providing legal services;Any person other than a business entities;A business entity with an aggregate turnover up to INR 20,00,000/- (INR 10,00,000 in case of special category states) in the preceding financial year.A senior advocate by way of legal services to:Any person other than a business entities;A business entity with an aggregate turnover up to INR 20,00,000/- (INR 10,00,000 in case of special category states) in the preceding financial year.

Pankaj Rawat (GST Practitioner) (55057 Points)
Replied 18 April 2019

YES YOU ARE CORRECT !!!!!, ITS ENTRY NO.45 , NOTIFICATION 12/2017 CT (R), ITS EXEMPTED, NO NEED TO DO RCM

ITS EXEMPTED WHEN PROVIDE TO : 1.WHO IS NOT BUSINESS ENTITY

2. TO BUSINESS ENTITY WHOSE AGGREGATE TURNOVER UPTO 20 LAC IN PRECEDING FY

BUSINESS ENTITY MEANS ANY PERSON CARRYING OUT BUSINESS

sagar kumar jha (student) (20 Points)
Replied 19 April 2019

But as per notification 13/2017 CT(R), if Legal Services by an individual advocate including a senior advocate or firm of advocates to any business entity located in the taxable territory comes under reverse charge mechanism