Service tax on legal service of advocate

Queries 964 views 3 replies

Sumit Rathod

CA Final

63 Points Joined January 2011

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?

Replies (3)

Sumit Grover

Chartered Accountant

3652 Points Joined September 2008

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.