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03. Services by Advocate receiving the consideration in the form of sponsorship fee of ` 50,00,000 from
CCP 03.03.11.00 Manini Private Limited, against the provision of sponsorship service.
Vakil & Vakil, a firm of lawyers rendered legal advice to B & Co., an architect, and Since the recipient of sponsorship services- Manini Private Limited is a body
MNO Ltd, an advertising agency during October, 20XX. Both B & Co. and MNO corporate, the tax on said services is payable by the recipient -Manini Private
CH 3
Ltd. are not entitled for threshold exemption in the said financial year. Who is Limited, under reverse charge.
Reverse Charge & ECO Will your answer be different if B & Co. and MNO Ltd. sought legal advice from Darpan Singhania is a director in Narayan Limited. The company paid him the
liable to pay GST in this case?

05. Services by director of company
Mr. A, a lawyer?
CCP 03.05.13.00
Answer:-
read with relevant notification In case of ,
1) As per section 9(3) of CGST Act, 2017
services supplied by an individual advocate including a senior advocate by way of
legal services, to a business entity. The liability to pay GST shall be upon the
was paid to Darpan Singhania amounting to ` 1.5 lakh for the month of January
recipient. sitting fee amounting to ` 25,000, for the month of January. Further, salary
on which TDS was also deducted as per applicable provisions under Income-tax
In the given case, as the services are provided by firm of lawyers law.
Vakil&Vakil to MNO ltd and B & Co. a business entity thus the liability to pay GST Tapasya & Associates, in which Darpan Singhania is a partner,

shall be upon MNO ltd and B & Co. supplied certain professional services to Narayan Limited in the month of
2) The answer will not change even in case where B & Co. and MNO ltd seek legal January for an amount of ` 2 lakh. Discuss the person liable to pay tax in each
advice from an individual lawyer. of the supplies involved in the given case. [ICAI Material]
Answer: Sitting fee paid to director – As per reverse charge notification, tax on
04. Sponsorship services services supplied by a director of a company/ body corporate to the said company/
CCP 03.04.12.00 body corporate, located in the taxable territory, is payable under reverse charge.

Manini Private Limited agrees to sponsor a sports event organized by Pink City Hence, in the present case, the sitting fee amounting to ` 25,000, payable to
Club in Jaipur. Manini Private Limited has paid an amount of ` 50,00,000 for such Darpan Singhania by Narayan Limited, is liable to GST under reverse charge and
sponsorship of the sports event. Consequently, said event was named after the thus, recipient of service - Narayan Limited – is liable to pay GST on the same.
brand name of Manini Private Limited. Examine who is the person liable to pay Salary paid to director - As per Circular No.140/10/2020 GST dated 10.06.2020,
tax in the given case. [ICAI Material] the part of director's remuneration which is declared as salary in the books of a
Answer: Section 9(3) provides that sponsorship services provided by any person to a company and subjected to TDS under section 192 of the Income-tax Act, are not
body corporate or partnership firm located in the taxable territory, shall be liable to taxable being consideration for services by an employee to the employer in the

GST under reverse charge in the hands of recipient. course of or in relation to his employment in terms of Schedule III.
In the present case, Pink City Club is the supplier of sponsorship services which is Therefore, in the given case, the salary received by Darpan Singhania of ` 1.5 lakh is
not liable to GST.
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