Applicability of GST on legal services by Advocates including Senior Advocates by CS Ekta Maheshwari



No Change Made In Taxation of Legal Services In The GST Era

In Press Statement dated 15th July, 2017, it was cleared as to whether the legal services provided by Advocates including senior advocates is in forward charge or reverse charge.

No change made in taxation of legal services under GST, FALLS UNDER RCM

The government has recently clarified that there is no change made in taxation of legal services in the GST era. In other words, the services provided by lawyers and law firms will continue to be taxed under the system where the onus of remitting the applicable tax amount to the government will lie with the clients receiving the service.

What does legal services includes??

Legal service has been defined to mean any service provided in relation to advice, consultancy or assistance in any branch of law, in any manner and includes representational services before any court, tribunal or authority.

As per Notification No. 13/2017- Central Tax (Rate), Services supplied by an individual advocate including a senior advocate by way of representational services before any court, tribunal or authority, directly or indirectly, to any business entity located in the taxable territory, including where contract for provision of such service has been entered through another advocate or a firm of advocates, or by a firm of advocates, by way of legal services, to a business entity.


Meaning of “by way of legal services”

The words “by way of legal services” are preceded and succeeded by comma. Therefore, the said words apply to an individual advocate including a senior advocate and a firm of advocates. Legal services provided by either of them are liable for payment of GST under reverse charge by the business entity.The words “by way of representational services before any court, tribunal or authority….” appear in conjunction with senior advocate without a comma and merely describe the nature and mode of representational services provided by a senior advocate to a business entity. It, therefore, follows that legal services, which includes representational services, provided by advocates are under reverse charge.

Hope this information will help you in your Professional endeavors. For further assistance/query, feel free to write to us.

Author: C S Ekta Maheshwari is the Author of this article and is Company Secretary by profession. The Author can be reached at csektamaheshwari14@gmail.com

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