Service tax leviable on services rendered by the Advocate and Senior Advocate under Reverse Charge

By: Admin
May 23, 2024
Categories: Important Pronouncements
4 Min Read

The Hon’ble Karnataka High Court in the case of Prashanth Sreedhar Shenoi v. Assistant Commissioner (Central Tax) Bangalore [Writ Petition No. 26096/2022 dated April 22, 2024] allowed the writ petition and held that, the services of legal professionals consisting of partnership firm of Advocates or an individual Advocate other than a Senior Advocate is exempt from levy of service tax to an advocate or partnership firm of advocates providing legal services to any person other than a business entity or a business entity with a turnover upto ten lakh rupees in the preceding financial year. Also, even when the individual advocate or partnership firm of advocate or senior advocate does not fall within the purview of the exemption notification, the service recipient is liable to pay service tax on the aforesaid services on reverse charge basis.

Facts:

Mr. Prashanth Sreedhar Shenoi (“the Petitioner”) and other related Petitioners are practicing Advocates and have questioned the veracity of the show cause notice, order-in-original and recovery notice issued by the Revenue Department (“the Respondent”) by way of filing the writ petition before the Hon’ble High Court praying for setting aside the Impugned Order and quashing the proceedings initiated by the Respondent as per the Impugned Order.

Issue:

Whether service tax is leviable on services rendered by the Advocate and Senior Advocate?

Held:

The Hon’ble Karnataka High Court in the case of Writ Petition No. 26096/2022 held as under:

Noted that, as per Clause 6(b) of Notification No. 25/2012-ST dated June 20, 2012 (“the Exemption Notification”), the services of legal professionals consisting of partnership firm of Advocates or an individual Advocate other than a Senior Advocate is exempt from levy of service tax to an advocate or partnership firm of advocates providing legal services, any person other than a business entity or a business entity with a turnover upto ten lakh rupees in the preceding financial year.
Opined that, even when the individual advocate or partnership firm of advocate who do not fall within the purview of the exemption notification, the service recipient is liable to pay service tax on the aforesaid services.
Further Opined that, in case of Senior Counsel, the recipient of the service is liable to pay service tax.
Held that, the Impugned Order and Recovery Notice is set aside.