Allow Cookies!
By using our website, you agree to the use of cookies
It is being believed that Advocates are totally out of GST, but none of the provisions of the act expressly mentions about it. However, if we analyse the provisions carefully, it can be seen that the statement is not fully true. Further in a decision taken in the 16th meeting of GST Council held on 11th of June 2017, the Council has decided to exempt individual advocates including Senior Advocates from GST registration. From various sources, it emerges that while most law firms are already registered under GST, individual lawyers are either not registered under GST or are reluctant to obtain registration. There is no logical basis for such differentiation in approach between individual lawyers and law firms as GST law does not differentiates between individuals and partnership firms, at least not in regard to obtaining registration.
The confusion persists around liability to obtain registration stems from the two seemingly in conflict provisions under GST. On one hand, GST law compulsorily states that a person making inter-state taxable supplies is compulsorily required to obtain registration; on the other hand, it is notified that persons who are engaged in making taxable supplies, tax on which is liable to be paid on reverse charge basis by the recipient of goods/ services are exempted from obtaining registration under GST.
Even the High Court of Delhi agreed with the above-stated position as stated in interim order passed in J.K. Mittal & Co. Vs. Union of India wherein it was observed, “till further orders, all legal services provided by advocates, law firms of advocates, or LLPs of advocates will be continued to be governed by the reverse charge mechanism unless of course any such legal service provider wants to take advantage of input tax credit and seeks to continue with the voluntary registration under Section 25(3) of the CGST Act and the corresponding provisions of IGST or DGST Act.”
Therefore, if one has to go by the letter of the law, so long as lawyers/ law firms are not providing services to foreign clients, they can abstain from taking registrations but where the intended recipient of legal services is located abroad, lawyers/ law firms must obtain registration under GST law. This may be an unintended consequence hitherto overlooked in the various analyses. One hopes that in the next GST Council meeting scheduled in January 2018, the GST Council lays down clear guidelines on the requirement to register for lawyers/law firms and other similarly situated service providers.
86540
103860
630
114
59824