The Delhi High Court clarified that the Goods and Services Tax (GST) on all legal services provided by Lawyers or Law Firms would be paid on reverse charge basis by the client.
Reverse Charge basis means that the tax will have to be paid by the service recipient which will be litigants under the present circumstances.
Several queries were posed regarding the release issued by the Finance Ministry subsequent to the High Court’s order on 12.07.2017 asking the Government to clarify on which legal services the GST was to be paid on Reverse Charge basis.
While listing the matter for further hearing on 14.09.2017, the Interim Order on 12.07.2017 of not taking coercive action against Lawyers and Law Firms for non-compliance of the GST Law, shall continue and would also cover the Limited Liability Partnerships (LLPs).
The Court also said that till further orders, all the legal services provided by the advocates, including senior counsel, Law Firms and LLPs will continue to be governed by the Reverse Charge mechanism.
The Indian Lawyer