No Notice for Payment of Service Tax / GST to be issued to Lawyers: Orissa HC directs GST Commissioner to issue clear instructions [Read Order]

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The Orissa High Court has directed the Commissioner GST to issue clear instructions to all the officers in the GST Commissionerates in Odisha that no notice demanding payment of service tax/GST will be issued to lawyers rendering legal services.

It has stated in the said affidavit that “after receiving information from Devi Prasad Tripathy having PAN as being an individual advocate practicing in the High Court of Odisha”, further proceedings against him are dropped.

A reference is made to a Notification dated 20th June 2012, in terms of which service tax liability of an individual advocate is Nil for legal services rendered to any of business entities located in the taxable territory. However, even for this, the Department appears to insist that the burden to prove it lies on the Petitioner. The counter-affidavit filed acknowledges that a similar notice was issued to the Petitioner in 2017 to which he replied, pointing out how he was not liable to pay any service tax.

Mr. P. K. Parhi, Assistant Solicitor General of India, has admitted that no notice in the first instance ought to have been issued to the Petitioner, who is a practicing advocate. However, when specifically asked whether the clear instructions have been issued by the Department to all the officers involved in the enforcement of the GST regime that practicing advocates should not be issued notices, he sought time for instructions.

During the hearing, certain other advocates present in the Court stated that they too have received such notices. It appears that despite knowing fully well that advocates are not liable to pay service tax or GST, notices continue to be issued to them by the GST Commissionerate.

The Bench of Chief Justice Dr S Muralidhar and Justice BP Routray observed that as per a notification issued in June 2012, the service tax liability of an advocate for legal services rendered is nil.

The court said that the Commissioner GST is directed to issue clear instructions to all the officers in the GST Commissionerates in Odisha that no notice demanding payment of service tax/GST will be issued to lawyers rendering legal services and falling in the negative list, as far as the GST regime is concerned. Copies of such instructions should be placed before the court on the next date.

The court was concerned about the deponent insisting that the petitioner should have submitted “documentary evidence to prove his claim that he is a practicing individual lawyer and does not come under the provision of GST or service tax”.

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