RCM in case of NEC Charges

Save Share

This query is : Resolved

Quick Summary

A manufacturing company received a bill for NEC charges from an advocate for bank limit enhancement services. The query concerns whether these charges are subject to the Reverse Charge Mechanism (RCM) under GST. The consensus is that RCM is applicable to advocate fees, with GST payable at 18%. This expense should be treated as a legal expense in the company's books, and the input tax credit (ITC) can be claimed.

Sanchit

Sanchit (Querist)
Follow

11 April 2022 Dear Sir,
We are a Manufacturig Company, Recently our Bank have raised our Cash Credit(C.C.) Limit and for that work (enhancing the bank limit ), bank papers by prepared by a outsider practitioner (advocate) and that advocate has raised a Bill to us comprises of NEC Charges of Rs. 5000/-.
I want to know whether such charges are covered under RCM and if yes, at what rate we will have to pay RCM.
And under which indirect expense we will have to treat such Expenses in our Books.