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Service tax on legal service of advocate

Sumit Rathod (CA Final) (63 Points)

25 February 2014

Sir, i am Sumit Rathod working in pvt ltd. company. I have two queries of service tax.

My company has pay Rs.16000 Cash to advocate for his legal consultancy service. advocate has small service provider hence he has not charge a service tax. where company has pay service tax on Rs 16000 base on Reverse Charge Mechanisam?
My company has pay Rs.10000 Cash to Individual for his legal & Professional service. he is also small service provider. where company has pay service tax on Rs 10000 base on Reverse Charge Mechanisam?

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Sumit Grover (Chartered Accountant ) (3652 Points)
Replied 26 February 2014

Assuming that the turnover of your company is more than Rs. 10 Lacs(hence, the same is not exempt under mega exemption- N/N 25/2012-ST, entry no. 6(b)).

Accordingly, in first case, the reverse charge liability shall arise on account of company by virtue of N/N 30/2012-ST, since in case of reverse charge, the threshold limit of Rs. 10 lacs(as available by N.N 33/2012) is not allowed for reverse charge.

In second case, since the amount is not paid to an advocate, hence no reverse charge shall apply.

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