The 20th meeting of the GST Council held at New Delhi had confirmed the applicability of reverse charge mechanism on all legal services provided to business entities.
It said that “To clarify that legal services (including representational services) provided by an individual advocate or a senior advocate or a firm of advocates (including LLP) provided to a business entity in taxable territory are covered under reverse charge mechanism.”
Earlier, A division bench of the Delhi High Court in J.K Mittal v. UOI had issued notice to the Central Government and the GST Council seeking for clarification on the applicability of reverse charge mechanism on legal services (not restricted to representational services) on lawyers.
In this context, the Government had issued a press release clarifying that legal service has been defined to mean any service provided in relation to advice, consultancy or assistance in any branch of law, in any manner and includes representational services before any court, tribunal or authority.
Questioning the legal sanctity of the press release, the High Court had held that all the legal services provided by advocates including senior advocates and Law Firms are subject to GST under reverse charge mechanism till the pronouncement of final order.
