A petition filed by Advocate Nipun Singhvi, a qualified Chartered Accountant and a financial activist before the Gujarat High Court are challenging the Goods and Service Tax on advocates services.
The petition is challenging the vires of Section 17(2) and 17(3) of the Central Goods and Services Tax Act, 2017 and the Gujarat (State) Goods and Services Tax Act, 2017 regarding the levy of Goods and Services Tax ( GST ) on Advocates stating that the lavy violates Article 14, 19, 21 & 265 of the Constitution of India.
The petition prays for introducing the mechanism for input tax credit on expenses done for advocates’ services to be paid by the litigants in absence of any provision.
The Gujarat High Court has issued notices to Centre, State and GST Council on Monday 21 June, against the filed petition.
The petition challenged the provisions as it restricts the credit of the input tax credit on goods/services or both used by advocates for effecting taxable legal services and exempt legal services.
The counsel for the petitioner, Advocate Vishal J Dave, submitted before the court that, “The tax to be paid by the litigant on taxable legal services in the absence of provision for availing of input tax credit by advocates is leading cascading of taxes since the tax component in the form of taxes on goods and services or both used by advocates, including the petitioner, for providing the said taxable legal services becomes part of the cost of the advocates which is passed on to the clients by way of professional fee on which again GST is chargeable.”
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The petitioner prayed to the government for introducing a mechanism for availing input tax credit on the expenses incurred with respect to goods and services availed by the advocates.
