2025-VIL-217-AAR
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SGST Advance Ruling Authority

GST - Taxability of reimbursement of foreign patent attorney fees under Reverse Charge - Applicant filed patent applications in Japan, USA and UK through its Indian service provider. The service provider raised invoices to the applicant which had two parts- Part A for reimbursement of foreign patent attorney fees and Part B for own fees - Whether the applicant is liable to pay GST under Reverse Charge Mechanism on the reimbursement of foreign patent attorney fees (Part A of the invoice) - HELD - The reimbursement amount does not qualify as a 'pure agent' transaction under Rule 33 of the CGST Rules, 2017 as the conditions therein are not satisfied - The applicant has paid beforehand the amount of expenses to be made by the Indian service provider (Seenergi IPR). It is not the case that service provider has incurred and spent some expenses on behalf of the applicant and then the applicant is reimbursing the same amount. Since the amount has been paid by the applicant beforehand, it cannot be considered as reimbursement per se. On the other hand, the Indian service provider is not providing the service of filing patent application for the applicant. So the amount under question is not consideration for any supply provided by Seenergi IPR. This is a case where the applicant has received service of filing patent application from foreign companies situated outside India – The foreign patent attorney services received by the applicant are legal services having SAC 9982, and as per the GST notifications, legal services provided by foreign advocates are taxable under reverse charge mechanism when provided to a business entity. The supply of the foreign patent attorney's legal service to the applicant is a taxable supply as per Section 9(3) of the CGST Act and Notification 13/2017. The place of supply is in India as per Section 13 of the IGST Act since the recipient (applicant) is located in India - The applicant is liable to pay GST under reverse charge mechanism on the reimbursement of foreign patent attorney fees (Part A of the invoice) as it is a taxable supply of legal services received from the foreign attorneys – Ordered accordingly
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