Practising advocates should not have to face harassment on account of payment of GST

Last updated: 09 August 2021

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The Orissa High Court has ruled that practising advocates should not be harassed by the GST department issuing notices for service tax or GST payments when they are exempt. The court acknowledged that advocates providing legal services often fall under a nil liability for GST. Despite this, notices were being issued, placing the burden of proof on the advocates. The Commissioner GST has been directed to issue clear instructions to prevent such notices from being sent to lawyers covered by the exemption.

Court :
Orissa High Court

Brief :
It is admitted that no notice in the first instance ought to have been issued to the Petitioner, who is a practising advocate. The Commissioner GST is directed to issue clear instructions to all the officers in the GST Commissionerates in Odisha that no notice demanding payment of service tax/GST will be issued to lawyers rendering legal services and falling in the negative list, as far as the GST regime is concerned.

Citation :
Devi Prasad Tripathy v. Principal Commissioner CGST & Central Excise, Bhubaneswar [2021] 128 taxmann.com 413 (Orissa)

Practising advocates should not have to face harassment on account of the Department issuing notices calling upon them to pay service tax/GST when they are exempted from doing so, and in the process also having to prove they are practising advocates.

Devi Prasad Tripathy v. Principal Commissioner CGST & Central Excise, Bhubaneswar [2021] 128 taxmann.com 413 (Orissa)

A reference is made to a Notification dated 20th June 2012, in terms of which service tax liability of an individual advocate is Nil for legal services rendered to any of business entities located in the taxable territory. However, even for this, the Department appears to insist that the burden to prove it lies on the Petitioner. It appears that despite knowing fully well that advocates are not liable to pay service tax or GST, notices continue to be issued to them by the GST Commissionerate

It is admitted that no notice in the first instance ought to have been issued to the Petitioner, who is a practising advocate. The Commissioner GST is directed to issue clear instructions to all the officers in the GST Commissionerates in Odisha that no notice demanding payment of service tax/GST will be issued to lawyers rendering legal services and falling in the negative list, as far as the GST regime is concerned.

FAQ :

Advocates providing legal services to business entities in the taxable territory may be exempt from paying GST, as per a 2012 notification. Their liability can be nil in such cases.

The issue was that the GST department was issuing notices to practising advocates demanding payment of service tax/GST, even when they were exempt from doing so.

The Orissa High Court ruled that practising advocates should not face harassment from the department issuing notices for GST payments if they are exempted.

The court indicated that the department should not insist on the petitioner (advocate) proving their exemption, especially when the exemption is clear.

The Commissioner GST has been directed to issue clear instructions to all officers in Odisha's GST Commissionerates, ensuring no notices demanding service tax/GST are issued to lawyers falling under the exemption.