Liability of GST on legal charges paid outside india

[SATYAPRASAD KOLLURU]

Sir,

A person availed legal assistance in the form of consultancy and representation in the foreign courts from an advocate of the foreign country. The payment towards legal charges was paid from India. Is GST applicable either as Reverse Charge as applicable to advocate services or Forward charge considering as import of service.

[Shilpi Jain]

The location of supplier is outside India.

PoS - In India

Inter-State supply so IGST to be paid under RCM

[Rajagopalan Ranganathan]

Sir,

The service availed is consultancy and representation in foreign courts. Therefore the place of supply of service is in non-taxable place. Therefore no gst is payable in India whether under RCM or forward charge.

[SATYAPRASAD KOLLURU]

Thank you sir.

[KASTURI SETHI]

GST is applicable under RCM.

[Ganeshan Kalyani]

In service tax there was a provision where if the service receiver and service provider both are in non taxable territory then service tax was not applicable.

[KASTURI SETHI]

In this context, the following decision of AAR Madhya Pradesh is relevant to go through :-

Citation : 2019 (9)TMI 694-AAR Madhya Pradesh.

Applicant : Directorate of Skill Development Global Skill Development Park.

[Praveen Nair]

I would agree with Mr. Ranganathan. RCM is not applicable in the given case.

The case cited by Mr. Sethi pertains to the service offered in India, hence not applicable.

[SATYAPRASAD KOLLURU]

My research indicates that GST is not payable for the following reasons.

1. The service provided by the overseas advocate will not attract GST under RCM, since he is not an advocate as per Indian Advocates Act 1961.

2. As per Sec 13(3)(b) of IGST Act, the place of supply is the place where the services are actually performed. i.e outside taxable territory.

3. The transaction only complies 2 conditions out of 3 conditions to be complied for import of service.

Hence GST is not payable. Please comment whether I am correct or not.

[KASTURI SETHI]

GST is applicable. Whether to pay or not is up to the querist ? Risk is yours. Sufficient material has already been posted.

[Atul Rathod]

I beg to differ from your view Mr. Satya Prasad Kolluru. As per my understanding Sec 13(3)(b) would be applicable where recipient or person on behalf of the recipient has be available physically with the supplier for the supply.

Advocate service can be even provide without physical appearance of recipient. Therefore it would not be applicable.

Therefore POS would be in India [13(1)] & location of recipient is in India-Liable under RCM.

[Ganeshan Kalyani]

GST is not applicable in this case.

[KASTURI SETHI]

If wrong decision arrived at, the defaulter will have to face the music in the form of interest and penalty.

AI Summary

Debate on GST Applicability for Foreign Legal Services: Reverse Charge Mechanism vs. Service Performed Outside India, No Consensus. A discussion on the applicability of GST on legal charges paid for services rendered by a foreign advocate reveals differing opinions. One perspective suggests GST is applicable under Reverse Charge Mechanism (RCM) due to the inter-state nature of the transaction, while others argue that since the service is performed outside India, GST is not applicable. Some participants reference legal provisions and past rulings to support their views, with a consensus lacking. The debate highlights the complexity of determining GST liability for cross-border legal services, with potential risks of penalties for incorrect tax treatment.