Service tax liability on reverse charge basis-legal fees
This query is : Open
02 December 2013
If any legal advocate, charges any professional fees to business entity for providing legal consultancy, on which TDS u/s 194J has been deducted, then is business entity liable for service tax on reverse charge basis? Can he deny from liability stating that the fees were professional & not legal?
02 December 2013
No. Service Tax can be avoided only if such services are provided for personal use and not for the purpose of business or profession which can be substantiated with documentation even in a situation where TDS has been deducted u/s 194J of the Income Tax Act 1961 mistakenly.
03 December 2013
thank you..
03 December 2013
but what if the advocate is an employee of the company and monthly legal & professional fees are paid to him on which tds u/s 194J has been deducted?
03 December 2013
but what if the advocate is an employee of the company and monthly legal & professional fees are paid to him on which tds u/s 194J has been deducted?
03 December 2013
if he is employee then TDS should be deducted u/s 192B and not u/s 194J then service tax won't trigger because then relationship is that of employee and employer and not of principal to principal basis.
please adopt clear cut policy when you are complying with law sothat non compliance or improper compliance doesn't boomrang.
please adopt clear cut policy when you are complying with law sothat non compliance or improper compliance doesn't boomrang.
03 December 2013
thank u sir for replying.. sorry i wrongly used the word employee... the advocate sits in the same premises & appointed as a professional person who charges professional fees for legal consultancy monthly, not as a salaried person.. now please reply, is company liable on reverse charge basis?
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