Allahabad High Court dismisses plea challenging 18% GST on online legal databases

The Allahabad High Court has dismissed a public interest litigation (PIL) challenging the levy of 18% Goods and Services Tax (GST) on online legal research and educational database services such as SCC Online and Manupatra [Aniket Gupta v. Union of India and 4 ors].

A Bench of Chief Justice Arun Bhansali and Justice Kshitij Shailendra declined to examine the constitutional validity of the classification under SAC 998431, rejecting the petition on the ground of delay after questioning the petitioner advocate’s "sudden awareness" of a tax rate that has been in force since 2017.

"The petitioner was enrolled in the year 2020 and claims to continue practising for last six years and, therefore, the sudden awareness about the tax being unreasonable and filing of the PIL at the instance of the said petitioner, cannot be countenance," the Bench observed while dismissing the plea.

The petition, filed by Advocate Aniket Gupta, argued that digital legal research databases including SCC Online, Manupatra, LexisNexis, LiveLaw and Bar & Bench are classified under Services Accounting Code (SAC) 998431 alongside online games and digital entertainment, attracting 18% GST without any concessional rate.

The plea highlighted an irrational disparity: printed law reports are entirely exempt from GST, e-books under the same entry are taxed at 5% and online journals supplied to educational institutions are tax-exempt.

In contrast, the identical material delivered via online databases is taxed at 18%, penalizing digital access.

Counsel for the petitioner submitted that legal research tools are not a luxury but an indispensable professional necessity.

The plea stressed that an annual single-user subscription to SCC Online costs up to ₹39,530 (including ₹6,030 in tax), equivalent to two months' stipend for a junior advocate under the Bar Council of India guidelines.

It was contended that unregistered advocates and legal aid counsel cannot claim input tax credit, turning the 18% levy into an unrecoverable cost that impedes affordable access to justice.

Explaining the timing of the challenge, the petition cited the Supreme Court’s recent rulings in Pooja Ramesh Singh and Vijay Ghanshyam Gadiya (July and September 2026), which established a "zero-tolerance" rule against AI-hallucinated citations and held that unverified submissions amount to professional misconduct. The plea argued that reliable commercial databases have become the mandatory safeguard by which advocates verify precedents and discharge their duty to the court.

The High Court, however, refused to delve into the merits or the arbitrary nature of the classification, dismissing the petition solely at the admission stage.

[Read Judgment]