Service tax on professional service

[Rajeev Khulbe]

Good evening to all experts,

Can you please tell me in case of service tax on professional service who will pay service tax service provider or service receiver.

Can you tell me that

what is legal service

what is professioanal service

[Ganeshan Kalyani]

Sir,

Professional service is not enumerated under reverse charge notification, hence service provider is liable to pay the tax. Thanks.

[KASTURI SETHI]

Dear Sh..Khulbe Ji,

Some professional services require holding professional licenses such as Chartered Accountant, Cost Accountants, Tax Advisors, Company Secretaries, architects, auditors, engineers, doctors and lawyers. Thus legal service also falls in the category of professional services. Now you may study RCM to know whether any particular service is covered in RCM or not.

[Suryanarayana Sathineni]

Dear Friend,

While concurring with the views of Sh. Kasturi Sethi Ji, I suggest you to pl. go through the Reverse Charge Notification for better clarity and also to get your self confirmed whether your so called professional service is covered or not.

Further, As stated already legal service also covered under professional services, it is exempted under both mega exemption for specified situation and also under reverse charge except, the services provided by a senior advocate.

Best Regards

Suryanaryana

[Ganeshan Kalyani]

Sir,

If the service, whether it may be legal or professional service provided by an Advocate or a firm of advocate to a business entity then it will be covered under reverse charge.

And if legal service is provided by a qualified professionals other than the advocate then it will not cover under reverse charge and no service tax under RCM. Thanks.

[KASTURI SETHI]

Fantastic clarification and explanation by both experts. Thanks.Thus I am also reaping the harvest of knowledge through experts.

[Ganeshan Kalyani]

Thanks Sri Kasturi Sir for your complement. Your words of appreciation are like gems to me. Thanks.

AI Summary

Reverse charge on professional services: recipient liability may apply for advocate-provided legal services to business entities.
Applicability of the reverse charge determines liability for service tax on professional services: ordinarily the service provider is liable because professional services are not generally covered under reverse charge, but legal services by advocates or advocate firms provided to business entities may shift liability to the recipient under reverse charge, while legal services by non-advocate professionals remain provider-liable.