Is RCM is appliocable in retainership service

[Affirmservicesconsultancy Privatelimited]

A Pvt. company (GST Registered) keep his retired employee for professional service and make payment as Professional fees for Retainer booked.

Is the payment made to the retired employee fall under RCM or not.

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AI Summary

RCM Not Applicable to Retired Employee's Professional Services; GST Registration Required if Earnings Exceed 20 Lakhs (Section 22). A private company queried whether payments to a retired employee for professional services are subject to Reverse Charge Mechanism (RCM) under GST. Four experts responded, clarifying that RCM applies to legal services provided by advocates, not to general professional services. Therefore, the retired employee's services do not fall under RCM. Additionally, if the retired employee's earnings exceed the GST threshold of 20 lakhs, they must register under section 22 and charge GST on a forward charge basis. The consensus was that RCM is not applicable in this scenario.