Service Tax under RCM on Very old invoice

[abbas mukhi]

Dear Experts,

If we are paying Advocate bill of 2004 now, then is there any liability of Service Tax under RCM and interest on it ?

[KASTURI SETHI]

Sh.Mukhi Ji,

In my view, answer is 'NO' as service was rendered when it was not taxable. Legal Consultancy Services were brought into Service Tax network vide Notification No.26/2009-ST dated 19.8.2009 (effective from 1.9.2009). Services provided by an Advocate as an individual was not taxable.Service provided by only business entity to business entity was taxable.POT Rules were brought into force on 1.4.2011. These rules talk of taxable service. Your service was not taxable during the year 2004. Hence also not covered under POT Rules.

[Ganeshan Kalyani]

Sir, I agree with the views submitted by Sri Kasturi Sir. Since the service was not at all taxable during the period it was provided the same is not taxable. Here documentation is necessary to be maintained. Because auditor may check the ledger account where you would have accounted the said expense. Thanks.

AI Summary

No Service Tax liability for 2004 advocate's bill under RCM; services taxable only from 2009. Maintain documentation. A query was raised about the liability of Service Tax under the Reverse Charge Mechanism (RCM) for paying an advocate's bill from 2004. Experts responded that there is no liability since the service was rendered before it became taxable. Legal consultancy services were included in the Service Tax network in 2009, and the Point of Taxation (POT) Rules were introduced in 2011. Therefore, services provided by an individual advocate in 2004 were not taxable. It was advised to maintain proper documentation as auditors might review the ledger accounts for such expenses.