Whether the partnership firm of advocate being business entity received service from individual advocate has to pay service tax under reverse charge mechanism on amount paid to individual advocate.
Whether the partnership firm of advocate being business entity received service from individual advocate has to pay service tax under reverse charge mechanism on amount paid to individual advocate.
|
Sl. No. |
Descripttion of service |
Provided |
Percentage of ST payable by the person providing service |
Percentage of ST payable by the person receiving the service |
|
|
By |
to |
||||
|
1 |
Legal service |
Individual Advocate or firm of advocates |
any business entity located in the taxable territory |
Nil |
100% |
As per the Entry No.6(b) (i) of the Mega exemption (i.e. Notification No.25/2012-ST as amended), it is not taxable and Reverse charge is not applicable.
Please visit: https://www.servicetax.gov.in/st-notfns-home.htm
As per one view, the transaction is hit by theprovisions of reverse charge mechanism.
On the other hand, the transaction falls under the exempted catagory as per entry no. 6(b) of Mega exemption notification No.25/2012.
Whether a shelter can be obtained that the transaction falls under the exemption catagory and so question of reverse charge is not applicable to it.
Yes,
In order to apply the provisions of reverse charge, first it has to be taxable.
In recent time High court delhi has stayed the reverse charge on advocacy services.
As per notification 25/2012 in sr. no. 6, Services provided by an individual as an advocate or a partnership firm of advocates by way of legal services to
i.an advocate or partnership firm of advocates providing legal services:,
ii any person other than a business entity or
iii a business entity with a turnover up to rupees ten lakh in the preceding financial year or
(c) a person represented on an arbitral tribunal to an arbitral tribunal;
It means a business entity is liable to pay 100% service tax under reverse charge machenism.
Thanks
-If services is provided to a business entity with a turnover up to rupees ten lakh in the preceding financial year
then it is exempt from service tax.
-If service is provided to a business entity with a If turnover more than Rs. 10 Lakh in the preceding financial year
then reverse charge provision is applicable and business entity is required to pay 100 % of service tax under reverse charge mechansim.
|
|
Services by Arbitral Tribunal or Advocate |
Arbitral Tribunal |
Business Entity
|
NIL |
100% |
Services provided to other than Business Entity or a Business Entity with a Turnover up to Rs 10 lakh in the preceding financial year are exempted by the way of Notification No 25/2012- ST dated 20th dated june ,2012 |
|
Individual Advocate |
NIL |
100% |
||||
|
|
NATURE OF SERVICE | SERVICE PROVIDER | SERVICE RECEIVER | SP LIABILITY | SR LIABILITY |
As per my opinion advocate /'firm of advocate provides services to other advocates / firm of advocates is not covered under service tax provisions
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