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RCM on Legal services

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Narendra Wod

46 Points Posted on 01 March 2021

Dear Respected all ,

Good morning. How are you?

I have a query, for example I am a Company, If i take legal services for 10000/-. from a Legal firm then few days later i make the payment of legal services fees and also make the payment of CGST 900 SGST 900 with reverse charges mechanism. now my quest is that ,1. can i get the CGST 900 & SGST 900 in the form of Input tax credit ?

2. Can i avail that the CGST 900 & SGST 900?

Replies (3)

Quick Summary

This discussion clarifies the eligibility for claiming Input Tax Credit (ITC) on GST paid under the Reverse Charge Mechanism (RCM) for legal services. If your business makes taxable supplies, you can generally claim ITC on CGST and SGST paid. However, if your business provides exempt supplies, you cannot claim ITC and must discharge the GST liability from RCM.

Amit Potadar

Consultant

94 Points Posted on 01 March 2021

Hi Narendra,

to avail ITC first you should be eligible to take credit. If you are eligible (providing Taxable Supplies) then avail the credit. if you are ineligible(Exempt Supplies) to avail credit then you have to discharge GST liability from RCM but you can't avail credit.

Regards,

Amit