Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

lawyer services

Sulabh Jain (18 Points)

31 August 2017

lawyer services means lawyer income exempt under GST ?

Reply
Follow
Share

1 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (174030 Points)
Replied 01 September 2017

No. Income tax is as per IT act....... it is applicable independent of GST.......

The common notion exists in the market that Lawyer is outside the purview of GST. However, this is false perception after analyzing the provision in a detailed manner. Services provided by an advocate are taxable under GST.

As per Notification No. 12/2017 (Central Tax- Rate) dated 28th June 2017, the following services of advocates are exempted:

(1) Services by firm of advocates / an individual advocate other than a senior advocate, by way of legal services to-

♦		an advocate or partnership firm of advocates providing legal services;
♦		any person other than a business entity; or
♦		a business entity with an aggregate turnover up to twenty lakh rupees in the preceding financial year

AND

(2) Services by a senior advocate by way of legal services to-

♦		any person other than a business entity; or
♦		a business entity with an aggregate turnover up to twenty lakh rupees in the preceding financial year.

Chargeability of GST in following cases:-

♦		When an individual advocate (including Senior Advocate) or a firm of advocates gives any legal services to a business entity with an aggregate turnover of Rs. 20 Lakhs or more in the previous financial year; and
♦		When a Senior Advocate provides any legal services to another advocate or firm of advocates.

Reverse Charge Mechanism

In the case of a Reverse charge, the recipient is liable to pay service tax. Service tax is paid and deposited by service receiver to the government. Under Section 9(3) of Central Goods and Services Tax Act, 2017 the Government, through a gazette notification, specifies categories of supply of goods or services or both, on which tax shall be paid on reverse charge basis by the recipient of such goods or services or both.

Reverse Charge Mechanism provided in legal services as per Notification No. 13/2017 (Central Tax – Rate) dated 28th June 2017, by which the liability to pay GST is fixed on the recipient of services in the case of following situations:

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

Services supplied by a firm of advocates by way of legal services, to a business entity located in a taxable territory.