RCM Applicability
This query is : Resolved
21 November 2020
Hi,
Our Company wants to reimburse legal fees(Advocate bills) to one of the directors incurred by him on personal capacity under a dispute, can someone suggest whether this will attract RCM under GST for the following two Case -
1 . Bill is in the name of the Director and submitted to the Company for reimbursement.
2. No Bill is submitted and claimed as settlement amount from the company.
Also, whether point no 2 will attract any TDS provision on Director since he is not submitting any bill.
Thanks
Our Company wants to reimburse legal fees(Advocate bills) to one of the directors incurred by him on personal capacity under a dispute, can someone suggest whether this will attract RCM under GST for the following two Case -
1 . Bill is in the name of the Director and submitted to the Company for reimbursement.
2. No Bill is submitted and claimed as settlement amount from the company.
Also, whether point no 2 will attract any TDS provision on Director since he is not submitting any bill.
Thanks
Lekhraj sood
(Expert)
22 November 2020
In my view, in both the cases , RCM is applicable because the advocate fees is finally borne by the company. The substance will prevail over form.
It is advisable to deduct TDS also to avoid any issue later on. Here also indirectly the fee is paid to advocate and born by the company.
It is advisable to deduct TDS also to avoid any issue later on. Here also indirectly the fee is paid to advocate and born by the company.
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