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RCM on legal

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Hatinder Sharma

37 Points Posted on 05 June 2020

We will pay the legal fee to advocate can RCM applicable in this case.

Replies (5)

Quick Summary

This discussion clarifies the applicability of Reverse Charge Mechanism (RCM) for legal fees under GST. RCM is indeed applicable, with IGST applying if the advocate is from another state, and CGST/SGST otherwise. Input tax credit can be claimed in the same month as payment to offset output liability.

CA Akshay Hiregange

Partner - Audit & Assistance

4825 Points Posted on 05 June 2020

Yes it would be applicable. Where the advocate is of another state, then IGST payable, if not CGST & SGST.

Levy arises based on Section 9(3) r/w notification 10/2017-CT(R)

Venkatanarayana GM

Partner associate at Hiregange & Associa

1279 Points Posted on 05 June 2020

Hi Hatinder Sharma,

In addition to Mr. Akshay advise, it is also to be noted that, after you make a payment, in the same month you can avail of input tax credit and setoff against output liability.

Hatinder Sharma

37 Points Posted on 05 June 2020

Ok Sir

Shivam RC

Student

23693 Points Posted on 05 June 2020

RCM would be applicable in this case under Section 9(3) of the CGST Act 2017 read with Notification No. 13/2017 - Central Tax (Rate), dated 28.06.2017.