LALIT KUMAR GANERIWAL (accountant) (241 Points)
08 September 2011ONE OF MY CLIENT A INDIVIDUAL LAWYER WHICH IS FALL IN SERVICE TAX FROM MAY,2011 NOW QUESTION IS ARISE FROM US I CAN CHARGES SERVICE TAX ON INDIVIDUAL CLIENTS OR NOT BECAUSE THIR ARE SOME LAWYER ARE START CHARGE ON SOME ARE NOT CHARGE ON INDIVIDUAL
NOW I CAN CHARGE ON INDIVIDUAL OR NOT
Madhukar N Hiregange
(Chartered Accountant)
(39034 Points)
Replied 08 September 2011
Your question is a little confusing.
Individual lawyers need not charge ST.
CA Prabhat Gupta
(Manager (Indirect Taxes))
(821 Points)
Replied 09 September 2011
Please refer to Para 2.3 of D.O. F. No.334/13/2009-TRU dated 07.06.2009. Legal Consultancy Service was brought under the Service Tax net in Union Budget 2009-10. However the liability to charge and pay service tax was limited to business entities only. Individual advocates, even if they provide services to entities are not liable to service tax. The relevant part of the letter is produced below:
“2.3 Legal Consultancy Service: As in the case of management consultancy or engineering consultancy service, any consultancy, advice or technical assistance provided in any discipline of law is proposed to be subjected to service tax. However, the tax would be limited to services provided by a business entity to another business entity. It has been defined that a business entity includes firms, associates, enterprises, companies etc. but does not include an individual. Thus, services provided by an individual advocate either to an individual or even to a business entity would be outside the scope of the taxable service. Similarly, the services provided by a corporate legal firm to an individual would also be outside the purview of taxable service. Any service of appearance before any court of law or any statutory authority would also be kept outside this levy.”
You can also refer to the following links:
https://indiabudget.nic.in/ub2009-10/bh/bh1.pdf
https://indiabudget.nic.in/ub2009-10/cen/dojstru2.pdf
I have also come to know that the central government had on April 25 issued a notification imposing 10% tax on the fee charged by lawyers for their services, which came into force from May 1. But recently the Delhi high court and some other High courts have stayed the Centre's notification imposing service tax on practising lawyers.
CA Prabhat Gupta
(Manager (Indirect Taxes))
(821 Points)
Replied 09 September 2011
Further to my knowledge, the taxability of Legal Consultancy Services came with effect from May 1, 2011 as mentioned in the notification issued by government on 24.04.2011. But the issued is under stay at various High Courts. I am not aware of the latest position.
CAclubindia
