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RCM on provision of expenses

Srishti (Employed in CA Firm) (58 Points)

22 October 2020

Is RCM applicable on the provision of expenses (legal fees) that we do on 31st March in our books?

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JATINDER KUMAR (Accountant) (3662 Points)
Replied 22 October 2020

Legal fees paid to the Advocate ?

please elaborate your query

Srishti (Employed in CA Firm) (58 Points)
Replied 23 October 2020

I have basically made a provision for the legal fees to be paid to an advocate on 31st March. I want to know whether I am supposed to pay RCM on it in my March Return or am I supposed to pay RCM when I actually remit the amount to the advocate?

In TDS, we deduct and pay TDS even when provision is made. That's why I have this confusion.

charu sharma (26 Points)
Replied 23 October 2020

GST liability on reverse charge arise only at time of making payment or with in 60 days from the date of issue of invoice whichever is earlier.
In the given case when provision booked in books .Hence reverse charge liability has not been arised.

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