In case of Cooperative Banks in Kerala audit is done by the Kerala State Cooperative Department auditors. The department collects audit fee from the banks relating to the salary cost of staff auditors assigned for the work.
The Audit Fee paid to cooperative department is an item of expenditure in the financial statements of the respective societies.
Is this amount liable for RCM ?
Debate on Whether Cooperative Bank Audit Fees Fall Under GST Reverse Charge Mechanism per Notification No. 13/2017 A discussion on whether the audit fee paid by cooperative banks in Kerala to the Kerala State Cooperative Department auditors is subject to the Reverse Charge Mechanism (RCM) under GST. Participants debated the applicability of Notification No. 13/2017, with some arguing that the audit fee is not liable for RCM as it is not specified in Section 9(3) and is a statutory duty, not a service. Others contended that since the audit is a statutory function and the fee is a consideration for services, it should be taxable under RCM. The discussion included interpretations of government authority definitions and legal precedents. (AI Summary)
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