2026-VIL-882-DEL
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SGST High Court Cases

GST - Reverse Charge Mechanism vs Forward Charge Mechanism - Services Rendered by Advocate as Insolvency Professional – Petitioner was appointed as Interim Resolution Professional by NCLT Delhi Bench for corporate debtor. Petitioner raised invoices for professional fees as Interim Resolution Professional. Resolution Professional called upon petitioner to issue GST compliant invoices claiming that GST is payable by Interim Resolution Professional. Petitioner contended that he is exempted from GST registration under Section 9(3) and (4) of CGST Act and Notifications 12/2017 and 13/2017 as Advocates are governed by reverse charge mechanism for legal services and GST if payable is on reverse charge basis - Whether Advocates acting as Insolvency Professionals are governed by reverse charge mechanism applicable to legal services or forward charge mechanism applicable to Insolvency Professional services – HELD - Notification No. 12/2017 and No. 13/2017 dated 28.06.2017 provide that services rendered by Advocates are governed by RCM. However this applies to legal services rendered by Advocates in capacity as Advocates. Services rendered by person in capacity of Insolvency Professional are governed by separate statutory framework under Insolvency and Bankruptcy Code and IBBI Regulations. IBBI Regulations prescribe independent eligibility criteria and registration requirements for Insolvency Professionals - The Scheme of Classification of Services specifically classifies Insolvency and Receivership services under separate entry 998241 distinct from legal services entry 99821. Principle of specific description prevailing over general description applies. When Advocate renders services as Insolvency Professional the role is that of Insolvency Professional not Advocate - Taxability is determined by nature of services rendered not by professional qualification of person rendering service. As per Scheme of Classification, Insolvency and Receivership services are specifically covered under head 99824 and are not covered by Notification No. 13/2017 applicable to RCM. Thus Advocates acting as Insolvency Professionals are governed by forward charge mechanism applicable to all Insolvency Professionals as class and cannot claim benefit of reverse charge mechanism - Advocates enrolled with Bar Council who act as Insolvency Professionals shall be governed by forward charge mechanism. They shall be liable to obtain GST registration and comply with all consequential requirements under CGST Act and rules and notifications thereunder in same manner as applicable to Insolvency Professionals as class. Petitioner directed to furnish GST compliant invoices in respect of professional fee charged for services rendered as Interim Resolution Professional – Ordered accordingly
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