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Court directs GST Commissioner to refrain from issuing tax notices to exempt advocates, seeks compliance measures The Court directed the GST Commissioner to issue instructions refraining from issuing service tax/GST notices to practicing advocates exempt under the GST ...
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Court directs GST Commissioner to refrain from issuing tax notices to exempt advocates, seeks compliance measures
The Court directed the GST Commissioner to issue instructions refraining from issuing service tax/GST notices to practicing advocates exempt under the GST regime. Advocates were burdened with proving their exemption despite being exempt, requiring documentary evidence. The Court referenced a 2012 Notification stating advocates' Nil service tax liability for legal services to businesses but noted continued demands for proof. Emphasizing the need for clear instructions, the Court sought compliance measures by the next hearing to prevent harassment of advocates.
Issues: 1. Whether practicing advocates should be issued notices to pay service tax/GST despite being exempted. 2. Burden of proof on advocates to establish their exemption from service tax/GST. 3. Compliance with Notification dated 20th June 2012 regarding service tax liability of individual advocates. 4. Instructions to be issued to GST Commissionerates regarding notices to practicing advocates.
Analysis: 1. The Court addressed the concern of practicing advocates facing harassment due to the Department issuing notices for service tax/GST payment, even though they are exempt. The Court directed the Commissioner GST to issue clear instructions to all officers in the GST Commissionerates in Odisha to refrain from issuing such notices to advocates rendering legal services and falling in the negative list under the GST regime.
2. The Court highlighted the issue of burden of proof on advocates to establish their exemption from service tax/GST. The Court noted that despite advocates being exempt from such taxes, they were required to provide documentary evidence to prove their status as practicing advocates and their exemption from tax liability.
3. Reference was made to a Notification dated 20th June 2012, which stated that the service tax liability of individual advocates is Nil for legal services provided to business entities in taxable territories. However, the Department insisted on advocates proving their exemption, even though similar notices were issued in the past and responses were provided by the advocates explaining their non-liability to pay service tax.
4. The Court emphasized the need for clear instructions to be issued by the Department to all officers involved in enforcing the GST regime regarding the exemption of practicing advocates from service tax/GST liabilities. The Court sought copies of such instructions to be presented before the next hearing scheduled for 22nd April 2021 to ensure compliance and prevent further harassment of practicing advocates.
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