Liability to pay rcm-legal fees [Resolved]

This query is : Resolved

Shaily Anandjiwala (Shah) (Querist)

19 March 2014 whether stax under rev. charge mechanism is payable for creation of provisional liability of legal fees? at the time of booking of prov. liability , invoice was not received (i.e. FY 2012-13). so RCM for prov. liability booking was not paid in FY 2012-13. Is it wrong?

CA. RAVIKUMAR

CA. RAVIKUMAR (Expert)

19 March 2014 Hi Shaily,
Please clarify me the following points.

1) Whether The creation of provision is for the services provided or agree to be provided?

2)Whether invoice is issued by the service provider?

3) Whether payment is made including any advance payment to the service provider?

Shaily Anandjiwala (Shah)

Shaily Anandjiwala (Shah) (Querist)

20 March 2014 Hi Sir,following is the case,

1) Creation of provision is for service which is continuous in nature- legal opinion in various cases

2) there are five invoices. Invoice dates are as follows

a- 25.5.2012
b- 11.5.2012
c- 22.8.2012
d- 01.06.2012
e- 25.7.2012

3)Date of Payment after adjusting provisional liability are as follows

a- 23.7.2013
b- 23.7.2013
c- 28.9.2012
d- 19.9.2012
e- 19.9.2012

4) We are PSU. and Stax under RCM is not paid in any of the above case.

I request to let me know the cases wherein we are liable to pay Stax under RCM.

Thanking you

-Regards
CA Shaily Shah

CA. RAVIKUMAR

CA. RAVIKUMAR (Expert)

20 March 2014 The point of taxation is the earliest of the following:
1.Date of invoice
2.Date of completion of provision of service
3.Date of payment

apply this for each and every transaction and arrive the point of taxation and pay under RCM.

Note: RCM on legal service is applicable only if Advocate entities turnover exceeding Rs.10 lakhs in the preceding year

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