Impact of GST on legal services

By / / GST
  • Legal service means 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.

2. Who is an advocate?

An Advocate is a person authorized to appear in a litigation on behalf of a party and who possess a law degree, enrolled with the Bar Council in accordance to the prescriptions laid by the Advocates Act, 1961.

  • Legal services can be rendered by,
    1. Courts/ tribunal (or)
    2. An arbitral tribunal (or)
    3. An individual advocate (or)
    4. A group of advocates (firm) (or)
    5. A senior advocate.

4. What is the difference between a tribunal and an arbitral tribunal?

  • A tribunal, generally, is any person or institution with authority to judge, adjudicate on, or determine claims or dispute – a tribunal has statutory jurisdiction and it is similar to a court of law
  • An arbitral tribunal on the other hand is a panel of unbiased adjudicators which is convened and sits to resolve a dispute by way of arbitration – an arbitral tribunal does not have any statutory jurisdiction.

5. Are the services provided by courts/tribunal exempted from GST?

  • As per Entry No 2 of Schedule III of the CGST Act, 2017, any service provided by a court or a tribunal which is established under any law for the time being in force is exempted from GST.

6. Are the services provided by an arbitral tribunal exempted from GST?

  • Legal services provided by an arbitral tribunal to the following persons will be exempt
    1. Any person other than a business entity.
    2. A business entity with an aggregate turnover upto Rs. 20 lakhs in the preceding financial year (Rs. 10 lakhs in the case of special category states).

7. Are the services provided by an individual or a firm of advocates exempted from GST?

  • Legal services provided by an individual or a firm of advocates to the following persons will be exempt
    1. an advocate or partnership firm of advocates providing legal services.
    2. any person other than a business entity.
    3. A business entity with an aggregate turnover up to Rs. 20 lakhs in the preceding financial year (Rs. 10 lakhs in the case of special category states).

8. Are the services provided by a senior advocate exempted from GST?

  • Legal services provided by a senior advocate to the following will be exempt,
    1. Any person other than a business entity
    2. A business entity with an aggregate turnover up to Rs. 20 lakhs in the financial year (Rs. 10 lakhs in the case of special category states).
  • Yes, services provided by senior advocates to other senior advocates, advocates or a firm of advocates will not be exempted from the levy of GST.

10. Who can qualify as a senior advocate?

  • A lawyer, with his consent, may be designated as senior advocate if the Supreme Court or a High Court is of that opinion that by virtue of his ability, standing at the Bar or special knowledge or experience in law, he is deserving of such distinction.
  • Visit this link to know more on the applicability of RCM on legal services
FAQ’s on Legal Services (Reverse Charge Mechanism)

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