Legal Services, Goods and Services Tax - GST

[Kaustubh Karandikar]

XYZ is having head office in Mumbai and warehouse at Bhiwandi. Head office registered as principal place of business and Bhiwandi as additional place of business. XYZ having sales office at Kerala which is not registered with GST since no outward supply from Kerala. Kerala office received a legal service from an advocate firm but bill for the same in the name of XYZ, Head office. Is Kerala office required to register with GST for paying GST under reverse charge on legal services or head office can pay since the bill is in the name of head office?

Posts / Replies

[Rajagopalan Ranganathan]

Sir,

Since the invoice issued by the Advocate firm is in the name of Head office they can pay gst under reverse charge. However the credit of gst cannot be distributed to Kerala Office since Keral office is not registered with GSt Authorities and there is no outward supply from there attracting gst liability.

[KASTURI SETHI]

Practically Head office is a single entity covering all its branches but as Section 25(4) of CGST Act, 2017, branch office is a distinct person and hence Kerala office should obtain separate registration under GST.

[CASusheel Gupta]

After amendment made on 01.02.2019, services provided by the supplier to any person on the direction of and on account of such registered person shall be deemed to have been received by registered person (section 16). As such Mumbai becomes eligible for ITC considering services rendered to Kerala on the direction of Mumbai.

section 2(93)

“recipient” of supply of goods or services or both, means–

(a) where a consideration is payable for the supply of goods or services or both, the person who is liable to pay that consideration....................

Mumbai can discharge IGST RCM and can raise outward supply bill to Kerala branch.

CA Susheel Gupta

9811004443