Service Tax/ GST on lawyers: Gujarat High Court grants interim relief to lawyers against demand notices by CGST dept

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The Gujarat High Court on Monday ordered that no coercive action should be taken against lawyers in relation to notices issued to them by the Central Goods and Service Tax Department (CGST Department) demanding payment of service tax/ GST.

A bench of Justices JB Pardiwala and Nisha M Thakore passed the ad-interim order after taking note of an Orissa High Court order passed in relation to this issue in March 2021.

“We take note of order passed by Orissa High Court on March 31, 2021. The matter requires consideration. By way of an ad-interim order, we direct that no coercive action shall be taken against advocates, law firm of advocates including LLPs providing legal service, for non-compliance with any legal requirements under CGST, DGST or IGST,” the order said.

The Court was hearing a plea by the Gujarat High Court Advocates Association (GHCAA) challenging demand notices issued to large number of its members.

When the matter came up for hearing, the Bench asked why the association has come forward instead of individuals who are affected.

Advocate Masoom K Shah, appearing for the petitioner-association, said that large number of lawyers are getting such notices because the Income Tax Department is not aware whether the concerned individual is a lawyer or not who is eligible for reverse charge mechanism under the law.

“Income Tax Department sends data (to CGST). The Department is not aware whether an individual is a lawyer or not. Large number of lawyers have received such notices,” said Shah.

The Court then proceeded to issue notice while granting ad-interim relief against coercive action.

Senior Advocate Saurabh N Soparkar led the case on behalf of GHCAA.

The Orissa High Court had in March 2021, directed the Commissioner, 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 practising advocates.

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