Is RCM applicable on rent or legal fees?

CA Vijay R Singh, FCA
Chartered Accountant · ICAI M.No. 153926 · FRN 136869W

Short answerLegal fees from an advocate or law firm attract reverse charge — the registered business pays the GST. Rent can attract RCM too: renting of residential property to a registered person, and (from a recent change) commercial property let by an unregistered landlord to a registered tenant. In each case you pay and then usually reclaim it.

Legal services

GST on legal services supplied by an advocate or law firm to a business is payable by the recipient under reverse charge. So if your company pays an advocate, you account for the GST, not the advocate.

Rent under RCM

Rent has become an RCM area to watch. Renting of residential property to a registered person attracts RCM, and a recent change brought commercial property rented by an unregistered landlord to a registered tenant under RCM as well. Commercial rent between two registered parties remains normal forward charge. This area changed in 2024 — confirm the current position.

A worked example

Example: your company pays ₹40,000 to an advocate and rents an office for ₹1 lakh a month from an unregistered owner. You pay GST under RCM on both, in cash, then claim it as ITC if for business use — usually tax-neutral but it must be recorded. Missing the rent RCM is an easy and costly slip. Our team can map your RCM liabilities.

GST

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This answer is general information for businesses, not tax advice. Tax rates, thresholds and forms change with each Finance Act — please confirm the current position for your own facts, or speak to us, before acting.