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The Goods and Services Tax, also commonly known as GST in India, offers a broader and formalised indirect tax structure without cascading effects of the VAT regime. GST is a multi-stage destination-based tax that is charged on every stage of value addition. The GST is a significant reform towards formalisation of the unorganised sector as well as making business operations easier and more accountable. And it is not just the ordinary taxpayers or the business owners; GST has impacted the legal community too. Although initially it was assumed that lawyers and law firms were outside the GST framework, but now it is clear that the Central Goods and Services Act or CGST Act includes advocates, services provided by advocates, legal advisors and law firms. In case, where GST is applicable, the rate of GST on legal services would be 18%.
As per Notification No-12 Central Tax
(CT) Rate dated 28.06.2017– Legal services refer to any
service provided concerning advice, consultancy or assistance in any branch of
law in a manner which includes representational services before any court,
tribunal or authority. Legal services can be explained as follows:
Before the enforcement of GST, service tax was applicable for legal firms in the following manner:
The Goods and Services Tax (GST) was effectively implemented on July 1, 2017, effectively replacing the service tax system and other forms of indirect taxes. There is no change in the order of taxation of legal services. Neither it applies the on reverse charge nor forwards charge for lawyers and law firms.
GST on legal services and advocates is chargeable according to the following conditions:
Notification no. 9-Integrated Tax (IT) (Rate) dated 28.06.2017 exempts the following services:
(ii) This is inter-state service (as per section 7 of the Integrated Good and Services Tax(IGST) Act) and tax needs to be paid by taking registration. This taxable service can qualify (not certainly) as ‘export of service’ subject to qualifying conditions. This is for entities registered outside India. As prescribed in section 2(6) of the IGST Act, sequentially to be eligible as export of services, the following conditions must be fulfilled:
(ii) Registration in case of Export of Services
(I) A turnover limit is provided in this exemption.
(ii) As per Section 16 of the IGST Act-Exporter of services cannot claim a refund of taxes as only a registered person can claim a refund.
The legal provisions for obtaining GST Registration to pay GST on legal services are as follows:
The basic principle
which is followed in levying the indirect taxes is the collection of tax by the
manufacturer or seller or service provider from the consumer of goods or
services. The manufacturer or the service provider then deposits the tax
with the concerned taxation authorities in India after making their output
An advocate, including a senior advocate, provides rate on GST on legal services. In order to represent a client before any court, tribunal or authority within a taxable territory, these services are liable to be taxed under GST laws in India.
Enterslice has professionals who will help you in getting GST Registration. Our experts will guide you in regarding the GST on legal services.
GST on legal services is quite similar
to the service tax regime. Application of GST on legal services offered by
advocates and law firms has undergone many changes. Now the lawyers do not need
to pay professional tax as it has been clubbed in one. The Central Government
has provided some exceptions to the taxable services of advocates. In current
time GST is applicable on advocates fees or law firms.
Read, More: GST on Education Services -A Complete Analysis
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