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April 9, 2021

Service provided by Lawyers are Exempted from Paying GST and Service Tax Orissa High Court directs department to not harass them by Issuing Demand Notices

by Mahesh Mara in GST, Legal Court Judgement

Service provided by Lawyers are Exempted from Paying GST and Service Tax Orissa High Court directs department to not harass them by Issuing Demand Notices

Facts of the case

The taxpayer is a practising lawyer in high court. As per entry no 45 of notification no 12/2017 the legal service provided by lawyer are exempt from paying GST. Even after receiving information from Devi Prasad Tripathy having PAN as being an individual advocate practicing in the Hon’ble High Court  of Odisha the GST department further asked for documentary evidence to prove his claim that he is a practicing individual lawyer and does not come under the provision of GST or service tax.

Issue of the case

The issue raised by the taxpayer is whether service provided by Lawyers are Exempted from Paying GST and Service Tax

Observation of the court

With reference to 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. The counter affidavit filed acknowledges that a similar notice was issued to the Petitioner in 2017 to which he replied, pointing out how he was not  liable to pay any service tax.

The Court expresses its concern that 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.

Conclusion

The High Court hereby directs the Commissioner of GST 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 GST regime is concerned. Copies of such instructions be placed before the Court at the earliest.

Read the full order of Orissa high court from below Link

Devi-Prasad-Tripathy-Vs.-Principal-Commissioner-CGST-and-Central-Excise-Orissa-High-Court

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