Skip to content

CA Intermediate · Taxation · Charge of GST

Anand, a registered supplier in Pune, is liable to pay tax under reverse charge on legal services received from an advocate in Pune. Which statement about charge of tax is correct?

Anand, as recipient, must pay GST under reverse charge, because legal services by an advocate to a business entity are notified under section 9(3) of the CGST Act. The liability does not turn on the advocate's registration, and the advocate does not collect the tax.

  1. AThe advocate must collect and pay GST on this supply
  2. BAnand is liable to pay GST as the recipient, as notified under section 9(3) of the CGST ActCorrect
  3. CAnand is liable only if the advocate is unregistered
  4. DGST is not payable because services by an advocate are exempt for all recipients

Explanation

Legal services by an advocate to a business entity are notified for reverse charge under section 9(3); the recipient pays tax. It does not depend on the advocate's registration. The exemption applies only to services to individuals or certain non-business recipients, not to a business such as Anand.

Did you get it right without looking?

One question tells you little. A timed set on Charge of GST shows your real accuracy, how long you take and where you lose marks.

Practise Charge of GSTFree diagnostic mock

More Charge of GST questions