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RCM Liability

subhagan sreerangam (7054 Points)

15 October 2024

A Registered taxpayer Paid to Advocate fees ₹ 4500 on 26/10/2020.In this Case the taxpayer have an any liability payable through RCM?

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Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294) (5128 Points)
Replied 16 October 2024

As per the GST regulations, Reverse Charge Mechanism (RCM) applies to certain services, including legal services provided by advocates. Since the taxpayer is a registered entity, they are required to pay GST on the advocate fees under RCM. In this case: - The taxpayer paid ₹4500 to the advocate on 26/10/2020. - The GST rate applicable would be 18% (as per the current GST rate for legal services). - The taxpayer needs to pay GST on the advocate fees under RCM. Calculation: - GST amount = ₹4500 x 18% = ₹810 - Total liability = ₹4500 (advocate fees) + ₹810 (GST) = ₹5310 So, yes, the taxpayer has a liability of ₹810 payable through RCM, which needs to be deposited along with the GST return. Additionally, the taxpayer may need to report this expense in their GST returns and claim input credit if eligible.

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Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294) (5128 Points)
Replied 16 October 2024

As per the GST regulations, Reverse Charge Mechanism (RCM) applies to certain services, including legal services provided by advocates. Since the taxpayer is a registered entity, they are required to pay GST on the advocate fees under RCM. In this case: - The taxpayer paid ₹4500 to the advocate on 26/10/2020. - The GST rate applicable would be 18% (as per the current GST rate for legal services). - The taxpayer needs to pay GST on the advocate fees under RCM. Calculation: - GST amount = ₹4500 x 18% = ₹810 - Total liability = ₹4500 (advocate fees) + ₹810 (GST) = ₹5310 So, yes, the taxpayer has a liability of ₹810 payable through RCM, which needs to be deposited along with the GST return. Additionally, the taxpayer may need to report this expense in their GST returns and claim input credit if eligible.

subhagan sreerangam (7054 Points)
Replied 16 October 2024

I pay to Advocate ₹4500 only

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