SERVICE TAX ON LEGAL SERVICES

[SUMEDH AYARE]

WE HAVE RECEIVED BILL FROM SENIOR ADVOCATE TOWARDS FEES FOR PROFESSIONAL SERVICES RENDERED. DETAILS : APPEARANCE BEFORE HON'BLE HIGH COURT IN CONNECTION WITH HEARING OF TWO APPEALS FOR THE ASSESSNEBT YEAR 2006-07. AS A SERVICE RECEIVER WHETHER I AM LIABLE TO PAY SERVICE TAX. (IS THERE ANY OPTION TO SAVE THE SERVICE TAX)

[LALIT MUNOYAT]

If your turnover in the financial year ended 31-03-12 exceeded ₹ 10 lakhs, then you are liable to pay service tax under RCM. Otherwise not. 

AI Summary

Reverse charge liability for legal services applies when recipient turnover exceeds the statutory threshold; otherwise no reverse charge. Liability to discharge service tax for professional legal services received depends on the reverse charge mechanism: if the recipient's taxable turnover in the relevant financial year exceeds the prescribed turnover threshold, the recipient must pay service tax under reverse charge; if the recipient's turnover does not exceed that threshold, the recipient is not liable.