Reverse tax on legal services received

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This discussion clarifies how to handle reverse tax on legal services received from advocates. You need to report these inward supplies liable to reverse charge in Table 3.1(D) of your GSTR-3B and pay the liability using your electronic cash ledger. Importantly, you cannot claim the Input Tax Credit (ITC) for these services in the same tax period; it can only be utilised in the following period under Table 4A of GSTR-3B. There is no requirement to report these transactions in your GSTR-1.

ASTEN AFM

ASTEN AFM (Querist)
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16 September 2023 Sir,

How to show Reverse tax on advocates services received in GSTR-1??

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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16 September 2023 Show it in GSTR 3b and pay RCM and claim ITC.
The recipient has to report in Table 3.1 (D) of GSTR-3B (inward supplies liable to reverse charge). The recipient has to discharge the liability through electronic cash ledger while filing his GSTR-3B. The recipient can utilise ITC on purchases under RCM only in the next tax period. He can claim it under Table 4A of GSTR-3B (eligible ITC).

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ASTEN AFM

ASTEN AFM (Querist)
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18 September 2023 Sir,
No need to show in GSTR 1 ??

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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18 September 2023 Yes, no need to show it in GSTR 1.

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