In its circular issued last day, the Central Board of Excise and Customs (CBEC) clarified that the legal services other than representational services provided by an individual advocate or a senior advocate to a business entity are liable for Goods and Services Tax under reverse charge mechanism.
“In case of legal services including representational services provided by an advocate including a senior advocate to a business entity, GST is required to be paid by the recipient of the service under reverse charge mechanism, i.e. the business entity,” the Board said.
With regard to the levy of tax on accommodation services, it was clarified that declared or published tariff is relevant only for the determination of the tax rate slab. GST will be payable on the actual amount charged (transaction value).
It further clarified that GST rate would be determined according to the declared tariff for the room, and GST at the rate so determined would be levied on the entire amount charged from the customer. For example, if the declared tariff is Rs. 7000 per unit per day but the amount charged from the customer on account of extra bed is Rs. 8000, GST shall be charged at 18% on Rs. 8000.
Regarding the levy of tax on casinos, the Board said that “entry to casinos” and “gambling” are two different services, and GST is leviable at 28% on both these services (14% CGST and 14% SGST) on the value determined as per section 15 of the CGST Act. Thus, GST @ 28% would apply on entry to casinos as well as on betting/ gambling services being provided by casinos on the transaction value of betting, i.e. the total bet value, in addition to GST levy on any other services being provided by the casinos (such as services by way of supply of food/ drinks etc. at the casinos). Betting, in the pre-GST regime, was subjected to betting tax on full bet value.
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