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

Service tax under reverse charge not payable on legal fees now where services were untaxable when rendered.
Services not taxable when rendered do not attract service tax under RCM on later payment. Legal consultancy and advocate services were brought into the service tax net effective from 1.9.2009 and Point of Taxation rules from 1.4.2011; a 2004 service therefore is not taxable now. Maintain documentation and ledger evidence to support the date and treatment of the expense for audit purposes.