The Bar Council of India (BCI) has issued a clarification regarding the new service tax imposed on lawyers. The 2009-10 Budget levied a service tax payable by law firms providing advice to non-individuals, causing unrest in the State Bar Councils across the country. In an attempt to calm the waters, the BCI sent a clarification to all advocates associations stating that the service tax is applicable only to law firms and not to independent legal practitioners.

Mr. Jai Ram Beniwal [left], the Vice Chairman of the Bar Council of India, told Bar & Bench that the clarification was issued due to the large number of strikes and protests by individual lawyers against the taxation. He further clarified the subject of taxation, saying, "Only partnership law firms are taxable under the new rules. Sole proprietor firms are not taxable, and nor are individual lawyers."