Orissa High Court: Lawyers Are Exempted To Pay Service Tax/ GST; Directs GST Department Not To Harass Lawyers

Orissa High Court: Lawyers Are Exempted To Pay Service Tax/ GST; Directs GST Department Not To Harass Lawyers

The Orissa High Court (HC) in the case titled Devi Prasad Tripathy v. The Principal Commissioner, CGST and Central Excise Bhubaneswar and others, directed Commissioner, Goods & Services Tax (GST) to issue clear instructions to all officers in Odisha clarifying that no notice demanding the payment of service tax/GST should be issued to practicing advocates.

The HC bench comprising of Chief Justice Dr S Muralidhar and Justice BP Routray noted that according to a notification issued in June 2012, the service tax liability of an advocate for legal services rendered is nil. It expressed its concern that the GST dept. should not harass the advocates by issuing notices calling upon them to pay service tax/GST when they are exempted.

A plea was filed by advocate Devi Prasad Tripathy regarding the said issue. The Court was informed by the Principal Commissioner, GST, and Central Excise, Bhubaneswar Commissionerate that further proceedings against the petitioner had been dropped after information was received that he is a practicing advocate.

The HC bench expressed concern that revenue authorities kept insisting the petition to give documentary evidence to prove his claim that he is a practicing lawyer for exemption from the levy of GST or service tax. The Court also took note that a similar notice was issued to Tripathy in 2017.

On behalf of the department, it was stated that no notice ought to have been issued to the petitioner as he is a practicing advocate. The Court inquired whether clear instructions have been issued to the tax authorities to refrain from issuing GST/service tax notices to practicing lawyers and the Attorney Solicitor General representing the revenue sought time.

During the hearing, certain other advocates present in the Court stated that they too have received such notices. It stated 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 HC bench 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 and falling in the negative list, as far as GST regime is concerned. Copies of such instructions should be placed before the Court on the next date of hearing.

The Court further stated that practicing advocates should not have to face such harassment and it posted the matter on 22 April 2021 for further hearings.