If GST applies, the GST rate for legal services would be 18%. Find the SAC code or GST rates. An individual lawyer, including senior counsel, provides the GST rate for legal services. In order to represent a client before a court, tribunal or authority in a tax jurisdiction, these services are subject to the GST laws of India. In 2012, the Services Tax Act introduced the negative list regime. Here, the government has included a specific GST exemption for any type of legal services provided by an individual or law firm. However, in cases where the fee is levied on the reverse charge mechanism, the reverse charge mechanism shall not be exempt. This means that the responsibility lay with the recipient of the service/customer. Don`t worry and talk to the best tax and human rights lawyers with MyAdvo! With over 10,000 lawyers in its network in 60+ cities, MyAdvo is India`s leading legal solutions and support platform.
No GST will be charged on interest charged on overdue accounts for fees or expenses, as interest is a “financial service” and is therefore exempt from GST. After the introduction of the GST by the government in July 2017, it underwent many changes during the period. Under the GST for legal services, senior counsel is a separate class in the reverse charge list. They fall under the list of categories of reverse charge services. Do you have to register for the GST in India? Or are you not sure about the GST for legal services? Even if legal services are provided to a company with a turnover of more than Rs 40 lakh, GST applies on a reverse charge basis. Below are the exemptions granted to lawyers, senior lawyers and lawyers for the provision of legal services under Communication No. 12/2017 Central Tax: This article assumes a basic knowledge of the GST and focuses on the main areas where the GST affects legal fees and provides useful information for practitioners. You can deduct accounting and legal fees you incur for advice and help keeping your records. You can also deduct the expenses you incur to prepare and file your income tax and GST/HST returns. There is an exemption from GST payment on lawyers` fees and law firm fees. Only if they provide their services to a person and not to a commercial entity. You cannot deduct legal and other costs you incur for the purchase of a capital asset, such as a boat or fishing equipment.
Instead, add these fees to the cost of ownership. In the case of legal services, services supplied outside India are considered exports of services provided that all conditions are met. Therefore, the RCM does not apply. Communication No 5/2017 – Central tax of 19 June 2017 is not applicable, as the export of services does not fall within the scope of the RCM. The export of services is considered an inter-State transaction; Therefore, Article 24 of the CGST Act is applicable and registration is mandatory if the turnover Rs. 20 lakhs exceeds According to Communication No. 13/2017 – Central Tax (Rate) of June 28, 2017, RCM applies to legal services provided to the business entity. If the services are provided outside India, RCM is not applicable as the business entity is located outside the tax jurisdiction.
This was approved by the GST Council, where GST would be levied on lawyers` fees and services. This also applies to the reverse charge category, which is provided by an individual lawyer and a senior lawyer. Does this mean that the reverse charge rules apply to lawyers who provide legal services to an organization but are not part of law firms? Well, if someone is not a practicing lawyer, he/she has to pay GST. However, you need to check the registration of a law firm that provides legal services outside of India. Apart from that, you should also check the receipt of the equivalent of foreign currency in India. In addition, a combined reading of the entries of headings 45(b)(ii) and 45(c)(iii) of Communication No. 12/2017-CTR, as amended, can be assumed that legal services provided by a single lawyer, lead counsel or law firm for a commercial entity with a total turnover in the previous financial year up to which the exemption from registration is granted: are exempt from GST. If you received a refund in the tax year for the types of expenses you deducted in a previous year, report the amount you received on line 13000, Other income, footnote 2 of your tax return.
