Reverse Charge on Government fee

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A partnership firm manufacturing Poha, which is GST exempt, paid fees to the State Government's Pollution Control Department and an advocate for legal advice. The key question is whether GST applies under the reverse charge mechanism (RCM) and if GST registration is required. Although the firm's own supplies are exempt, registration is mandatory if taxable supplies covered by RCM are received, irrespective of any threshold limit or exemption on their outward supplies.

PARAS CHHAJED

PARAS CHHAJED

(Querist)
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18 November 2021 A partnership firm manufacturing Poha (Rice Flakes) which is exempt from GST, therefore the firm did not get itself registered under GST, has paid fees to Pollution Control Department of State Government Rs.50,000 and paid fee to an advocate for legal advice Rs.25,000.

Please advise applicability of GST under reverse-charge mechanism and requirement of registration under GST.

B Sathyanarayanan

B Sathyanarayanan (Expert)
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19 November 2021 sir you take to take registration and then only you will be eligible for RCM , but in your case and going through case laws , you better get GSTN and deduct RCM ,if cross the threshold Limt .

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Udaya Chandran

Udaya Chandran (Expert)
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19 November 2021 Please note that irrespective of the threshold limit or being exempted for the supplies you provide, you need to get GST registration if you receive taxable supplies which are covered under reverse charge mechanism.

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