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St on advocate fee

prajapath.s.k. (manager accounts) (79 Points)

04 August 2012

Dear ca clubians,

please i would like to know whether service Tax appliacable on advocates fee on appearance in a court, pl let me know whether this activity is taxable or not

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CS RAJESH C.CHOUDHARY (ASSISTANT MANAGER) (14607 Points)
Replied 04 August 2012

Dear Prajapat,

yes, service tax applicable in all the advocate

According to Section 65 (105)(zzzzm) of the Finance Act, 1994 (as amended),

Taxable service means any service provided or to be provided to:

(i) to any person, by a business entity, in relation to advice, consultancy or assistance in any branch of law, in any manner;

(ii) to any business entity, by any person, in relation to representational services before any court, tribunal or authority;

(iii)to any business entity, by an arbitral tribunal, in respect of arbitration.

Thus with effect from 1.5.2011, as per clause (i) above, if a service in the natue of advice, consultancy or assistance in any branch of law, is provided by a business entity (i.e. a law firm etc.) to any person - that person can be either an individual or a business entity, then service tax is attracted, subject to the threshold limit of Rs. 10 lakhs being fulfilled.

In terms of clause (ii) above, if any person (i.e. an individual lawyer, not a law firm) provides REPRESENTATIONAL SERVICE to a business entity (not to an individual), then the same will attract service tax, again provided the threshold limit of Rs. 10 lakhs is satisfied.

In other words, if a lawyer provides service to an individual it will not attract service tax.

However, if an individual lawyer provides representational service (i.e. appearance before any court, tribunal or authority etc.)to a Business entity, it will attract service tax.

Wherever the service tax is applicable, the lawyer concerned can charge the same to the client showing separately the service tax.

Regards,

RAJESH CHOUDHARY