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Service tax on lawyer fees

anita (trainee) (514 Points)

03 March 2015

Is service tax levied only on the fee component of lawyer's fees?

For eg is the fees is 50,000 and 5,000 is towards expenses, Then will service tax be levied on 50,000 or 55,000

If they are shown separately in the bill, then will it be levied only on 50,000?

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8 Replies

sesha (accounts executive) (1101 Points)
Replied 03 March 2015

Any business entity having turnover more than Rs.10 lacs in preceding financial year.iis applicable for adovocates& lawyers then service tax is applicable only 50000 and not rs 55000 out ofpocket expenses sholuld notchaged as service tax.lawyers will only servvice accounting head.

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bharath kumara (assitant) (35 Points)
Replied 03 March 2015

In case he cross the 10 lakh per annum turnover. Than how can he show there invoice please explain me.....

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Ca Nitin karwa (own practice) (64 Points)
Replied 04 March 2015

It falls under reverse charge. . no turnover criteria is there earlier s.tax on reimbursement is nt applicable but from new budget of 15 16 s tax will applicable to whole amt of invoice. so s tax on rs. 55000 by the service reciver is payable

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Gagan Deep Singh (CHARTERED ACCOUNTANT) (1190 Points)
Replied 04 March 2015

I agree with sesha, it is specifically mentioned under notification no. 25/2012 that any business entity with turnover upto Rs 10 lac in the preceeding fy is exempted from service tax. Secondly if turnover exceeds Rs 10 lac then reverse charge will be applicable as per notification no. 30/2012. After amendment in budget 15-16 reimbursement expebses will be included in valuation but date of applicability is stilln not notified.

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Saurabh Maheshwari (B.com,ACA) (5923 Points)
Replied 04 March 2015

Thanks all.

To add-Reimbursable expenditure shall be included in the value of taxable services(Amdt to Sec 67 of FA,1994) to be effective from the date of enactment of Finance bill,2015

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