Service Tax on Senior Advocates: Petitions in different HCs transferred to Delhi HC
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Service Tax on Senior Advocates: Petitions in different HCs transferred to Delhi HC

Murali Krishnan

The Supreme Court today transferred the petitions relating to the levy of Service Tax on Senior Advocates filed in different high courts to the Delhi High Court.

The order was passed by a Bench of Justices Madan B Lokur and Deepak Gupta in a transfer petition filed by the Central government.

Solicitor General Ranjit Kumar, appearing for the Centre, contended that similar petitions are pending in different high courts, including those of Calcutta, Allahabad, Gujarat, Kerala, Punjab & Haryana and Andhra Pradesh & Telangana.

He sought a transfer of these petitions to a common high court or the Supreme Court.

The respondents opposed the same, arguing that no issue remains after the clarification issued by the Centre that Service Tax, and now GST, shall be paid on reverse charge basis.

The Court, however, proceeded to transfer the petitions filed in different high courts to the Delhi High Court.

In last year’s budget, Finance Minister Arun Jaitley had decided to tax the services offered by senior advocates to an advocate or a law firm on a forward charge basis. This meant that the senior counsel would have to collect the tax (at the rate of 14 per cent) and deposit this with the authorities.

The same was challenged in the Gujarat High Court and Delhi High Court. The Supreme Court had also granted leave in an appeal from a Bombay High Court ruling that dismissed the challenge.

Subsequently, the Finance Minister clarified that Senior Advocates, like other advocates and law firms, would be covered under reverse charge mechanism.

Story to be updated.

Corrigendum: This story earlier mentioned that the matter was related to GST on lawyers. The error is regretted.

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