Applicability of RCM on Advocate Services

[Arif Kathiria]

Dear Experts

Our Client is claiming exemption vide notification no. 2/2017 and further amended 27/2017. Finished products are wheat flour, Dal etc. Our question is wether RCM on advocate services be applicable ??

[KASTURI SETHI]

RCM is applicable on Advocate Services if the services are received by a business entity. (There are other conditions also). Your client is a business entity irrespective of the fact that he is dealing in the supply of exempted goods. For example ; Petrol is out of the scope of GST but if the petrol dealer hires services of an Advocate, GST is to be paid by the petrol dealer under RCM.

I also point out that Notification No.2/17-CT (R) dated 28.6.17 has amended vide Notification no.28/17-CT(R) dated 22.9.17 and not vide Notification No.27/2017 as mentioned by you. Notification No.28/17 makes branded goods ineligible for exemption from GST. The goods put up in unit container were already ineligible.

[Ganeshan Kalyani]

The applicable of RCM liability is upon the nature of service availed and not on the type of supply of goods. The condition given in Notification 13/2017-CTR dated 28.06.2017 as updated from time to time need to be referred to see the applicable of RCM liability.

AI Summary

Reverse charge on advocate services applies when services are received by a business entity regardless of exempt supplies.
The Reverse Charge Mechanism for advocate services is triggered when such services are received by a business entity, irrespective of whether the recipient supplies exempt goods; RCM liability depends on the nature of the service and must be determined by reference to the conditions in the governing notifications, including amendments that narrow exemption scope for certain goods.