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

Place of supply rules determine GST liability on foreign legal services; reverse charge may apply if POS is in India. Whether GST applies to legal consultancy and foreign court representation paid from India hinges on place of supply and reverse charge. One view treats the supplier outside India with place of supply in India, invoking the Reverse Charge Mechanism and IGST because the recipient is in India and services can be supplied without recipient presence. The contrary view treats the place of supply as abroad since services are performed outside India, so GST is not attracted under forward charge or RCM; an incorrect position risks interest and penalties.