Reverse charge on professional fees
This query is : Resolved
16 December 2013
Hi,
There is C.A currently working in a pvt Ltd Co. wants to apply for COP.
However he will be now taking Professional Fees instead of Salary from the company.But the problem is its Company will considered his fees as inclusive of Service Tax & will deduct it considering Reverse Charge Rule.
Need help whether Reverse Charge is applicable in Professional Fees.
& if Yes, What if He Applies for Service Tax No. & Gave a declaration to the company that his total Income is Less Than 10Lacs.
There is C.A currently working in a pvt Ltd Co. wants to apply for COP.
However he will be now taking Professional Fees instead of Salary from the company.But the problem is its Company will considered his fees as inclusive of Service Tax & will deduct it considering Reverse Charge Rule.
Need help whether Reverse Charge is applicable in Professional Fees.
& if Yes, What if He Applies for Service Tax No. & Gave a declaration to the company that his total Income is Less Than 10Lacs.
16 December 2013
Hello Nirav,
Reverse charge mechanics of service tax is not applicable for professional fees charged by CA/CS/ICWA.
If a company received the professional service from CA, Company is not liable to deduct and pay the service tax on behalf of professional.
Reverse charge mechanics of service tax is not applicable for professional fees charged by CA/CS/ICWA.
If a company received the professional service from CA, Company is not liable to deduct and pay the service tax on behalf of professional.
16 December 2013
Hi,
Thanx for your reply!!!
Can u please provide any Supporting Documents / evidences for the same!!!!
Thanx for your reply!!!
Can u please provide any Supporting Documents / evidences for the same!!!!
22 July 2025
Sure! Here’s a clear explanation with references about Reverse Charge Mechanism (RCM) on professional fees paid to CAs:
Key points:
Professional services by CA/CS/ICWA are exempt from service tax, if their aggregate turnover is less than ₹10 lakhs (threshold limit).
Reverse charge does NOT apply on professional fees paid to CAs, CS, ICWAs.
The company paying professional fees is NOT required to pay service tax under reverse charge on such services.
Supporting legal references:
Notification No. 30/2012-ST dated 20 June 2012: specifies services on which reverse charge is applicable. Professional services by individual professionals like CA, CS, ICWA are excluded.
Section 66A of Finance Act 1994: specifies that reverse charge applies only on notified services. Professional services by CA, CS, ICWA are not notified for RCM.
Circulars from CBEC clarify that RCM is not applicable for professional fees paid to CA/CS/ICWA.
CBEC Circular No. 146/1/2013-ST dated 27 March 2013 explicitly mentions that services by professionals are exempt or not liable under RCM.
Summary for your case:
Situation Applicability of RCM
Company pays professional fees to CA/CS/ICWA RCM NOT applicable
CA has turnover below ₹10 lakhs Exempt from service tax anyway
CA has turnover above ₹10 lakhs CA liable to pay service tax on own; company not liable under RCM
What company should do?
Do not deduct or pay service tax under RCM on professional fees paid to CA.
CA should take Service Tax registration only if turnover exceeds ₹10 lakhs.
Company can pay fees without service tax.
Key points:
Professional services by CA/CS/ICWA are exempt from service tax, if their aggregate turnover is less than ₹10 lakhs (threshold limit).
Reverse charge does NOT apply on professional fees paid to CAs, CS, ICWAs.
The company paying professional fees is NOT required to pay service tax under reverse charge on such services.
Supporting legal references:
Notification No. 30/2012-ST dated 20 June 2012: specifies services on which reverse charge is applicable. Professional services by individual professionals like CA, CS, ICWA are excluded.
Section 66A of Finance Act 1994: specifies that reverse charge applies only on notified services. Professional services by CA, CS, ICWA are not notified for RCM.
Circulars from CBEC clarify that RCM is not applicable for professional fees paid to CA/CS/ICWA.
CBEC Circular No. 146/1/2013-ST dated 27 March 2013 explicitly mentions that services by professionals are exempt or not liable under RCM.
Summary for your case:
Situation Applicability of RCM
Company pays professional fees to CA/CS/ICWA RCM NOT applicable
CA has turnover below ₹10 lakhs Exempt from service tax anyway
CA has turnover above ₹10 lakhs CA liable to pay service tax on own; company not liable under RCM
What company should do?
Do not deduct or pay service tax under RCM on professional fees paid to CA.
CA should take Service Tax registration only if turnover exceeds ₹10 lakhs.
Company can pay fees without service tax.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Applicability of TDS on CFS, CHA fees, and shipping line charges
- Notice from IT DEPTT IF FD AMOUNT EXCEEDS 10 LACS
- Applicablity on tds
- Unable to generate and save json file for updated return
- GST payable under RCM
- Tax audit & Switching from Presumptive taxation
- Section 194I not showing in TDS RPU for Compnay Assessee for TDS on rent
- LTCG offset against property buy
- PRODUCT AND SERVICE CATEGORY CODE
- Tax Part CGST SGST OR IGST
- Advance money given for supply of goods
- Import purchase entry
- Rule 54(1A) for Distributing ITC
- Received advance money for supply of goods but forfeited by us since full money not received
- EXCESS CREDIT REALTED GST REVERSAL
- Export invoice not reported
- CA Articleship Extension Matter
- GST OFFICER WRONG NOTICE
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Composition Dealer GST Annual Return Filing process
Trending Online Classes
-
LIVE Course on GSTR-9 & GSTR-9C (Technical | Practical | Concept - Based)
Sachin Jain03 November 2025
CAclubindia
