Recently, The Orissa High Court has directed the Commissioner, GST to give clear instructions to all the tax officers for “no more notices to be sent to practising advocates” for imposing services tax/GST on legal services.
The Bench of Chief Justice BP Routray and Justice Dr. S Muralidhar also commented that as per the notification that has been issued in June 2012, the Goods and Services Tax (GST)Liability of an advocate for rendering legal services is nil. Apart from alarming notifications, the income tax authorities have sent notices to lawyers demanding payment of service tax.
Consequently, the court has issued notices to Income Tax Officers who demanded payment of service tax from practicing lawyers. So the court has now taken the decision to call for the issuance of directions to avoid such a course of direction.
The Order Released by the Orissa HC
“The Court expresses its concern that practicing advocates should not have to face harassment on account of the Department issuing notices calling upon them to pay service tax/GST when they are exempted from doing so, and in the process also having to prove they are practicing advocates. The Commissioner GST is directed to issue clear instructions to all the officers in the GST Commissionerates in Odisha that no notice demanding payment of service tax/GST will be issued to lawyers rendering legal services and falling in the negative list, as far as the GST regime is concerned. Copies of such instructions are placed before the Court on the next date.”
Advocate Devi Prasad Tripathy filed the plea in the Orissa High Court on the aforesaid issue. Principal Commissioner of GST and Central excise of Bhubaneswar Commissionerate informed the court that further proceedings against Tripathy had been stopped after receiving the information that he is a practising advocate.
As per Assistant Solicitor General of India, PK Parhi, the aforesaid notice of GST to Tripathi ought not to have been issued since he is a practicing advocate. The court asked Solicitor General PK Parhi whether clear instructions have been issued to Tax officers to refrain from issuing notices to practicing lawyers. The ASG asked for some time to give instructions.
Furthermore, other lawyers were also present in the High Court during the hearing of Tripathi and said that they have also received similar notices. The bench remarked as follows:
“It appears that despite knowing fully well that advocates are not liable to pay service tax or GST, notices continue to be issued to them by the GST Commissionerate.” Further Court adjourned the matter till April 22.
