Question20: Head office (HO) has taken ISD registration under GST. It has not taken Regular GST registration. Now, HO has received invoice of Lawyer in its name. How can HO pay GST under RCM'

Answer Please note that the registration of ISD is suggested when you taking various input service & distributing it to the distinct person. Hence you are operating as co-coordinator. Now coming to the requirement of section 23, Section 23 requires registration of person if the service is provided by the person is more than 20 lakh/10 lakh.

The Head office is a distinct person as per the definition in Section 25 (4). The HO is doing certain activities like employed certain staff or doing back-end work for various unit /company. The staff appointed by HO works for various units may be without consideration. But as per clause 2 of schedule I, the work done by staff of HO is a supply by HO to different company. There is a confusion in general that the HO is required to be registered as ISD instead HO is required to be registered as normal supplier also.

Further for tax planning If you are getting HO registered as normal supplier then you can get credit of Inputs and capital goods which is not available in case of ISD.
If you are working purely as ISD & not doing anything for any of your unit then you are working as ISD. In this case Service provided by advocate to a business entity is exempt under S.no 45 of notification 12/2017-CT.
Thus the liability to pay reverse charge does not arise. (Reply dt. 06/4/2018)