Senior Advocates under Service Tax Scanner [Official Gazette Attached]

Service Tax for Senior Advocates

In a major changes in Service Tax (Amendment) rules 2016, Finance Ministry has notified 14% Service Tax for Senior Advocates.

The Union Budget for the Financial Year 2016-17 was announced by the Finance Minister Arun Jaitley yesterday at Lok Sabha. A lot of changes has been proposed in the area of Service Tax including imposition of additional 0.5% Krishi Kalyan Cess on all taxable services.

Some of the exemptions like Services provided by a Senior Advocate to an advocate or partnership firm of advocates etc were withdrawn by the government and a person represented on an arbitral tribunal to an arbitral tribunal. However, the existing dispensation regarding legal services provided by a firm of advocates or an advocate other than senior advocate will be continued. The Minister, during his speech, also confirmed that these changes will come into force w.ef. 1.4.2016.

The Service Tax Rules, 1994 has been amended through Notification No. 19/2016 published by the Central Government dated 1.3.2016. The present amendment proposes a change in rule 2 (1)(i)(d)(D)(II)andmakes the Senior advocates of an advocates firm and persons representing on arbitration tribunals to come under the ambit of Service Tax. The rule provides mandatory filing of annual returns for every FY by the assessee before 30th November of the succeeding FY.

The rule also imposes a penalty on the assessee for delay in filing return. The amount will be Rs. 100 per day for the period of delay.

Read the Official Gazette.

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