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It is foremost to know the brief connotation of GST before starting the explanation of the applicability of GST on legal services. Still, the nation has a faded idea about the implementation of GST therefore it is foremost GST is a composite, value-added tax, levied on goods and services in the Indian subcontinent to generate revenue or income. It is considered as an alternative to indirect tax which is an integrated tax. Originally, GST was introduced to mold the financial or economic structure of the country, the concept of GST was also severely criticized, but when it came into force and became operational, it eliminated the effect of taxes. Had given. The authority charged 26.5% per unit in respect of many products before GST came into existence.[1] Earlier the structure of the Indian taxation system was restructured, it included Value Added Tax, Excise Duty, Tariff Service Tax etc. GST continues in India and is classified into four tax brackets which starts at 5% and ends at 28%. Advocate services have been included in the GST and it has affected the legal sector as well.[2] The popular belief is that GST does not apply to legal services like lawyers and law firms. However, for lawyers and the law body, the question of the materiality of GST remains and continues to be so. When professional persons or law firms render any kind of legal favor of an organization or institutions whose total income in the previous financial year is 20 lakhs or more, senior advocates or law firm pursuing legal services is chargeable to GST to other lawyers.[3] Applicability of GST on advocates and legal services:-

GST law was implemented very smoothly. Nothing is moderate in the taxation of legal services even this law does not apply to the reverse charge or forward charge for the advocates and laws entity. Legal services pointed that any kind of favor furnished with esteem to the advisory counselling, guidance, assistance, or authority in any class of law which is consist of emblematic services proceedings to any court of law or jurisdiction.

Central goods and services tax came beneath the GST law. CGST act 2017 has been approving and assemble to collect and impose a tax on the inter-state supply of products by the Central Government. This tax has been implemented on the entire Republic of India by eliminating the Union Territories of Jammu and Kashmir.

The GST rate on legal fees for lawyers incorporating the exemptions which were fetched from the prior existing form of taxes is included in Article 279A of the Indian constitution. Section 7 of the CGST Act deals with imposing where the word “supply” consists of all kinds of supply of products or services or both for consideration and in furtherance of business. Fees of lawyers or firms are exempted from payment of GST if they render their services to the people and not to any commercial entity. The exemption would be given to the business unit whose turnover is up to 20 lakhs for the Journal category and up to 10 lakhs for the special category. Several changes had occurred in the GST law. “On 3rd August 2017 GST was introduced” thus GST has gone through numerous changes over the years.

A distinct category has been made in the reverse-charge list for the senior advocates/ lawyers and to further their services under the GST law. After that information, it is clear that individuals or law entity is responsible for making payment under the reverse-charge list which had notified in the GST law. Law firms and advocates pursuing their legal services will have an identical output for GST liability of their own.

Still, the question will arise that all the lawyers or law firms are getting exemptions from registration under the GST for the legal services. Hence, it is necessary to enroll how the law firms are getting register for pursuing legal services outside India and also focus on how the foreign exchange amount will be received in India.


Legal services state that beneath entry 2(zm) of notification no. 12/2017 – Central tax (rate) on the date, 28.06.2017 defines it as follows- ‘Legal service is 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. It assists with a render that notification No. 13/2017-Central Tax (Rate) dated 28.6.2017, (Serial No. 2) specifies, inter alia, the following service under reverse charge mechanism as- ‘Services supplied by an individual advocate including a senior advocate by way of representational services before any court, tribunal or authority, directly or indirectly, to any business entity located in the taxable territory, including where a contract for the provision of such service has been entered through another advocate or by a firm of advocates, or by way of legal services to a business entity.

By the Finance Act 2009, legal services have been put forward under indirect tax and later GST has been imposed on advocates or law entities. [4]The main objective was to extend the indirect tax pattern to every sector where economic activities are carried out. Service tax comes under the category of legal advice whether the service tax is levied on legal services which are taxable.

The Service Tax Act recognized the negative list system in 2012. For any kind of legal services being pursued by lawyers or business entities, the government has imposed a certain GST exemption on them. So at that time, it was checked that there was no registration by law firms or lawyers, but now as per the new scheme regulated from 2017, GST was leviable to advocates and law firms. Hence the question arises whether the law of reverse charge mechanism applies to those lawyers who are rendering their services in the organization but are not considered as part of the legal entity.

 Before the amendment in GST law, taxes are not paid by both the service provider and the recipient. Tax is chargeable if the service is availed by a person who is not a lawyer by profession. GST is applicable on fees of entities and lawyers, but GST could not be paid by them. A practicing lawyer has to be registered under the GST law, but it is not mandatory for lawyers and now there is no need to pay any professional taxes as all taxes are clubbed together.


The partnership firm and individual have to follow the same procedure to obtain the registration of GST law. It has become mandatory to obtain registration under the GST law. It should be chargeable to persons making inter-state supplies. It is informed that persons who are engaged in making taxable supplies have been barred from GST registration. The purpose behind that recipient is to re-compensate on the products and services based on the reverse charge mechanism. GST on reverse charge will not be implemented when the people had found abroad. Instead of they have to obtain the registration for lawyers in India. They will be released the liability of GST to ascertain the benefits of exports which will fall under the category of law entity, LLPs and lawyers etc.

Lawyers/law entities must trace the registration under the GST law for taking the benefits of exports services and invoices are markup for the foreign purchaser. Lawyers or legal entities that do not get registration may not be capable to take the advantage of export commodities and services. Further IGST was charged for inter-state supplies and liability imposed on the Service supplier, not to the recipient of goods and services based on reverse charge mechanism.

Therefore, “the Central Government has notified and provided certain exemptions to the chargeable services of advocates” which are mentioned below

  • Legal services provided by an individual or firm to an individual, non-business entity whose turnover is less than 20 per cent, the re-designated entity is exempt from tax.
  • The same legal services are provided by individual advocates or firms of advocates to a business entity whose turnover exceeds the limit in case of goods of 40 lakhs and 20 lakhs in case of services, tax is chargeable under reverse charge.
  • Legal services rendered by senior advocates to individual advocates or firm advocates, generating taxability under forwarding charge.
  • Senior Advocates pursuing their legal services for Non-Business Entity, Renamed Business Entity and Govt., Exempted from Tax.
  • Tax under reverse-charge is charged when a senior advocate renders his legal services to a business entity whose turnover is more than 49 lakhs in case of goods and 20 lakhs in case of services.


The Reverse charge mechanism had found in previous service tax law. Generally, tax is payable by the person who dispenses the services but beneath the RCM the liability to pay tax has shifted to the beneficiary of services. The liability to pay tax is stable on the receiver of supply of products instead of the supplier furnishes the legal services. GST has been allowed to both advocates and senior advocates. If any client constituted in front of the court, tribunal, or authority are beneath with ratable region and pursuing services are responsible for beneath GST law in India. The burden was imposed on the recipient to pay tax for the legal services upon the basis of the reverse charge mechanism under the GST law. Section 9(3) of GST 2017 mentions that the payment is made by the customers on maintenance of legal services by the beneficiary and presently deposited to the government. It is also mandatory for lawyers or firms to obtain registration to provide legal services based on the reverse charge mechanism under GST law. GST is levied on legal services if the total income exceeds 20 lakhs.


It had elucidated by the GST council in August 2017. GST has been imposing on the services of lawyers, senior advocates or law firms based on the reverse charge mechanism. Further, in the case of SK Mittal and Company, the company sued a writ petition had to check the rationality of RCM beneath the GST for advocates and law firms.

GST has been chargeable on the lawyer’s fees and services. Therefore, a separate category has been set up for the advocates and the law firms under the RCM. The statement given above has been approved by the council known as Good service and Tax council. Hence, GST on the legal fees has been implementing on the reverse charge mechanism basis said by the GST council. The Finance Ministry had cleared all the doubts regards to GST and approved that GST has been levying on the legal services of advocates and law firms.

Author(s) Name: Shikha Mishra (Student, Banasthali Vidyapith, Jaipur)





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