Legal Services and liability

[Alkesh Jani]

Sir,

The Standing Counsel providing legal service i.e. to say representational service, to the Govt. Department or to the Board and bill is raised in the name of HOD of the Govt. Department. Now the query is

Q.1. Whether this activity falls under Section 9 (3) or 9(4) of CGST Act,2017?

Q.2. If it falls under Section 9(3), then Govt. Department is required to take registration and pay appropriate GST on RCM basis?

Q.3. If the answer to Q.2 above is “Yes” and if Department has not obtained registration then SCN is required to be issued to HOD or DDO (Drawing and Disbursement Officer)?

Thanks in Advance

AI Summary

Taxation of legal services: recipient status determines reverse charge or forward charge; exemption awaits formal notification.
Whether legal services to government departments fall under the reverse charge mechanism hinges on recipient status: RCM applies to services provided to a business entity, and government exercising sovereign functions is not a business entity, so departments need not register or pay under RCM absent a notification. The GST Council recommended exemption for legal services to government entities, but that recommendation is not operative law until notified. Treatment of charitable trusts and non-profit entities remains uncertain and may logically attract forward charge, subject to formal clarification.