Service Tax on legal expenses

[Ravindra Gajelli]

Dear Sir,

 

I would like to know How the service tax department keep a track of service tax of legal service provider who is not liable to pay service tax but 100%by the service recipient. What is if the service recipient forgot to pay the service tax on such services. How the government reconcile such situation.

[YAGAY and SUN]

The Government Official may seek information from your Books of Accounts, Bank Statement, Profit and Loss account, List of litigations, and from your Balance Sheet.

It is advisable to pay service tax honestly.  Be proactive and reconcile your accounts on your own even before department's audit etc.

AI Summary

Reverse charge on legal services: recipient liable for tax; failure to pay invites documentary reconciliation and assessment.
The government may verify reverse charge compliance on legal services by seeking books of account, bank statements, profit and loss accounts, lists of litigations, and balance sheets; taxpayers are advised to pay service tax honestly and to proactively reconcile records prior to any departmental audit or enquiry.