An error in a 28 June notification where only lawyers and law firms that provided “representational services” were exempt from goods and services tax (GST) was recently rectified as a result of a petition filed by law firm JK Mittal & Co in Delhi High Court.
The Department of Revenue issued a correction on 25 September, which stated that GST would be applicable on a reverse charge basis on services “provided by an individual advocate including a senior advocate or firm of advocates by way of legal services, directly or indirectly”. It said that legal services include “advice, consultancy or assistance in any branch of law, in any manner, and includes representational services”.
A 19 May meeting of the GST Council – a joint forum of central and state governments that makes recommendations on important issues related to GST – had recommended that GST be applicable only on a reverse charge basis for legal services as a whole. However, the 28 June notification had limited it to “representational services before any court, tribunal or authority”. JK Mittal & Co had challenged the constitutional validity of the notification.
In an interim order passed on 12 July, a two-judge bench of Delhi High Court had directed that “no coercive action be taken against any lawyer or law firms” until the government clarified the discrepancy.