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Rcm on professional fees

Guddi (employee) (769 Points)

01 August 2017

A company is paying professional fees(40000-tds @ 10%) = 36000 p.m*12 = 4,32,000 p.a. to few employees who are not registered under gst. Is the company liable to pay GST under Reverse charge? I think the company is liable to pay RCM and can claim ITC of the same. And GST is payable @ 18% on 40000 = 7,200. Am i correct? Please answer.. Thanks in advance.

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19 Replies

Shashikant Varshney (Chartered Accountant) (763 Points)
Replied 01 August 2017

No Professional services are not covered under Reverse Charge under GST.

Gopal Kumar Gupta (Accounts & Tax Consultant) (206 Points)
Replied 01 August 2017

if you pay professional fees then you have to pay get on RCM basis. below calculations are OK.
Mob 9883087539

Shashikant Varshney (Chartered Accountant) (763 Points)
Replied 01 August 2017

Dear Gopal,

Professional Fees are not covered under Reverse Charge.

Gopal Kumar Gupta (Accounts & Tax Consultant) (206 Points)
Replied 01 August 2017

Dear Shashi

thanks. but still I have doubt.

Shashikant Varshney (Chartered Accountant) (763 Points)
Replied 01 August 2017

Sorry Gopal,

As per Section 9(4), they need to give the GST under Reverse Charge.

SANTOSH MANCHALA (CA) (78 Points)
Replied 01 August 2017

there is nothing to do, is they are professionals or contractors or else, if they are not registered under GST, RCM will came into picture.

Gopal Kumar Gupta (Accounts & Tax Consultant) (206 Points)
Replied 01 August 2017

Yes right all you are. Don't need to say sorry. It is a new Act and all of us helping each other.

Arun Kumar Singh (GST Advocate) (15188 Points)
Replied 01 August 2017

If professional is unregistered then you need to pay GST under reverse charge mechanism and take the credit after payment.

Guddi (employee) (769 Points)
Replied 03 August 2017

Thank you all for your valuable replies

Hiren Upadhyay (Officer Accounts) (22 Points)
Replied 15 November 2017

but at what %

tejaswinee (Student) (63 Points)
Replied 17 November 2017

Thankyou so much even I was wondering about this question since a long time.

Whether to pay GST on RCM basis on professional fees or not. Now that I have came to know this that I need to pay GST on RCM basis. Since July we have not paid GST on Professional fees on RCM basis.

What can be done on this as out GSTR3B, GSTR1 has already been filed per month till October 2017.

Please help me on this.

Ashutosh Kumar Pandey (Others) (33 Points)
Replied 29 November 2017

Sir Professional fees is Taxable under RCM in GSt

Ashutosh Kumar Pandey (Others) (33 Points)
Replied 29 November 2017

GST rate for tax consultancy and preparation services is 18%

SAC Code 998231 – Corporate tax consulting and preparation services
SAC Code 998232 – Individual tax preparation and planning services

18% GST rate is applicable for SAC Code 998399 – Other professional, technical and business services, technical and business services.

Ashutosh Kumar Pandey (Others) (33 Points)
Replied 29 November 2017

Tejaswinee Ji

If u have filed your 3B and GSTR-1 without paying RCM libilities of that month and you recd the bill or made the payment in that month ,then you have to pay interest on rcm libilities