Medtrainai Technologies Pvt. Ltd. to Pay GST under Reverse Charge for Patent Filing Services Abroad
In a landmark decision, the West Bengal Authority for Advance Rulings (AAR) has ruled that Medtrainai Technologies Private Limited must pay Goods and Services Tax (GST) on reimbursements made for foreign attorney fees under the reverse charge mechanism. This decision was delivered by members Shafeeq S. and Jaydip Kumar Chakrabarti on December 24, 2025, and it clarifies the tax obligations of Indian companies procuring legal services from foreign entities for patent filings.
Medtrainai Technologies sought clarity on whether GST was applicable on reimbursements for foreign attorney fees related to patent filings in Japan, USA, and UK. The company argued that since the transactions occurred outside India, the GST laws should not apply. Additionally, they stated that they did not derive any monetary benefit from these patents within India, and hence the reimbursements should not be considered as supply under GST laws.
However, the AAR concluded that the reimbursements for legal services rendered by foreign attorneys indeed qualify as a supply of legal services, which falls under the purview of GST as per Entry No. 2 of Notification No. 13 - Central Tax (Rate) dated June 28, 2017. The ruling emphasized that the recipient of the service, Medtrainai Technologies, is located in India, making the place of supply India, and therefore, GST is applicable under the reverse charge mechanism.
The ruling further clarifies that the exemption provided under Notification No. 12 - Central Tax (Rate), which exempts certain legal services from GST, does not apply to services rendered by foreign attorneys, as these do not align with the definitions provided under the Advocates Act, 1961. The AAR's decision underscores the necessity for Indian firms to comply with GST regulations when engaging foreign legal services, ensuring clarity in cross-border transactions and tax liabilities.
The decision serves as a precedent for other Indian entities seeking similar legal services abroad, reinforcing the applicability of GST under the reverse charge mechanism for imported legal services.
Bottom Line:
GST applicability on reimbursement of foreign attorney fees for filing patents abroad under the reverse charge mechanism.
Statutory provision(s): Central Goods and Services Tax Act, 2017, West Bengal Goods and Services Tax Act, 2017, Notification No. 13 - Central Tax (Rate) dated 28.06.2017, Section 13 of the IGST Act, 2017, Section 7 of the CGST Act, 2017, Notification No. 12 - Central Tax (Rate), 2017, Advocates Act, 1961.
Medtrainai Technologies Private Limited, (AAR)(West Bengal) : Law Finder Doc Id # 2835418
