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Practising advocates exempted from service tax/GST, should not have to face harassment from GST Department: Orissa High Court

The Orissa High Court recently directed Commissioner, GST to issue clear instructions to all officers in Odisha clarifying that no notice demanding the payment of service tax/GST should be issued to practising advocates (Devi Prasad Tripathy v. The Principal Commissioner, CGST and Central Excise Bhubaneswar and others).

The Bench of Chief Justice Dr S Muralidhar and Justice BP Routray observed that as per a notification issued in June 2012, the service tax liability of an advocate for legal services rendered is nil.

Despite this, the Department appears to have issued notices to lawyers demanding the payment of service tax, the Court observed. As such, the Court has now called for the issuance directions to avoid such a course of action.

The order reads:

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. 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 GST regime is concerned. Copies of such instructions be placed before the Court on the next date.”

Before the Court was a plea moved by advocate Devi Prasad Tripathy on the issue.

The Court was informed by the Principal Commissioner, GST and Central Excise, Bhubaneswar Commissionerate that further proceedings against Tripathy had been dropped after information was received that he is a practising advocate.

However, the Bench expressed concern over the authorities’ insistence that Tripathy give documentary evidence to prove his claim that he is a practising lawyer for exemption from the levy of GST or service tax. The Court also took note that a similar notice was issued to Tripathy in 2017.

Assistant Solicitor General of India, PK Parhi admitted that no notice ought to have been issued to Tripathy since he is a practising advocate. However, on being asked by the Court if clear instructions have been issued to the tax authorities to refrain from issuing GST/service tax notices to practicising lawyers, the ASG sought time to get instructions.

Coupled with this, other lawyers present in Court during the hearing also informed that they have received similar notices, prompting the Bench to remark,

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.

Practising advocates should not have to face such harassment, the Court went on to observe before adjourning the matter until April 22.


Via Bar & Bench
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