Service tax on legal fees

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Radhakrishnan K.V. (Querist)

17 November 2014 Hon'ble Delhi High Court in W.P.(C) 5957/2012 and CM No.12257/2012 had stayed the collection of service tax on legal fees.What is the present position? Whether Sections 65B(44) and 66B of the Finance Act, 1994 (as amended by the Finance Act, 2012) as well as Rule 2(1)(d)(D)(II) of the Service Tax Rules, 1994 is operative at present?

CA Ravi Kumar Murugesh

CA Ravi Kumar Murugesh (Expert)

19 November 2014 On legal fee, service tax is applicable on reverse charge basis.

Radhakrishnan K.V.

Radhakrishnan K.V. (Querist)

19 November 2014 Thank you Ravikumarji. But what is the present position of the verdict of Delhi HC?

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

24 July 2025 As of now, the Delhi High Court's interim stay on the levy of service tax on legal services under the reverse charge mechanism (RCM) remains in effect. The court's order, dated September 21, 2012, specifically stayed the implementation of Sections 65B(44) and 66B of the Finance Act, 1994, as amended by the Finance Act, 2012, along with Rule 2(1)(d)(D)(II) of the Service Tax Rules, 1994. This stay prohibits the enforcement of service tax on legal services provided by advocates to business entities under RCM until further notice. ([Business Standard][1], [TaxGuru][2], [www.slideshare.net][3])

Therefore, the provisions related to service tax on legal services under RCM are currently not operative, and no service tax is required to be paid on such services during this period.

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