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Service tax input quary

Neeraj Joshi (Accounts executive) (97 Points)

06 May 2016

We are a Service Tax assesse. & we have made 1 payment of Rs. 12000 to our sales tax consultant who is a advocate for his professional fees. now i want to know that i have to deposit S.Tax on behalf of him & if yes then can i take input credit of this S.Tax paid.

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Mir Irshad Ali (Partner) (192 Points)
Replied 06 May 2016

Service Tax on Reverse Charge basis in respect of consultancy/legal advice is applicable in terms of Notfn. No. 30/2012-ST [I(A)(iv) only on services provided or agreed to be provided by an individual advocate or a firm of advocates by way of support services, otherwise the service tax on such services is payable by the service provider.

However, since the person providing Sales Tax consultancy is an advocate, it is debatable as to whether Service Tax is payable under Reverse Charge Mechanism.

Even if the service tax is paid by the service reipient under RCM, the service appears to be correctly covered under definition of input services as "legal service" and cenvat credit can be availed.