Tuesday, April 16, 2024

Allahabad High Court directs GST Commissioner to issue clear instructions regarding payment of Service Tax/GST to lawyers for legal services

The Lucknow Bench of the Allahabad High Court has directed the GST Commissioner to issue clear instructions to the GST Commissionerate, Lucknow not to issue notices regarding payment of Service Tax/GST to lawyers for legal services.

The Division Bench of Justice Alok Mathur Justice Jyotsna Sharma passed this order while hearing a petition filed by Pankaj Khare.

The petitioner by means of the petition has challenged the order dated 22.05.2023 passed by Deputy Commissioner, CGST & Central Excise Division Lucknow – 1, Lucknow thereby assessing the petitioner with regard to service tax and levying tax and interest to the tune of Rs 332651/-.

Counsel for petitioner has assailed the said order stating that the same is illegal and arbitrary and without jurisdiction.

He submitted that as per Notification dated 20.06.2012 the service tax admitted for any individual advocate is nil for services rendered to any business entity situated in the taxable territory. The petitioner is a practicing advocate and as such he was exempted from service tax.

At the very outset, Dipak Seth, counsel for the respondents, has produced before the Court an order dated 06.06.2023 whereby the respondents have themselves dropped the proceedings against the petitioner.

During the hearing a number of members of the Bar have informed the Court that similar notices have been issued to the various members of the Bar. The Court expresses its concern that practicing advocates should not have to face harassment on account of the department issuing notices and calling upon them to pay service tax/GST when they are exempted from doing so and in the process also calling them to prove that they are practicing advocates.

The Court directed the Commissioner, GST to issue clear direction to the GST Commissionerate in Lucknow that no notices regarding payment of service tax /GST is issued to the lawyers rendering legal service falling in the negative list so far as service tax is concerned.

With the above observations and directions, the Court disposed of the petition.


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