Article on GST Applicabilities on Advocate Services

What is the meaning of advocate, advocate services and senior advocate

The meaning of these words has not been defined in the CGST Act

However

As per definations provided by Notification No 12/2017 Central Tax Rate:-

2(b) “advocate” has the same meaning as assigned to it in clause (a) of sub-section (1) of section 2 of the Advocates Act, 1961 (25 of 1961)

2(zm) “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(zzd) “senior advocate” has the same meaning as assigned to it in section 16 of the Advocates Act, 1961 (25 of 1961)

As per Advocate act 1961

Section 2(1) (a) of Advocate Act 1961

 " Advocate" means an Advocate entered in any roll under the provision of The Advocate Act 1961.

Section 2(1) (k) of Advocate Act 1961

roll” means a roll of advocates prepared and maintained under this Act;

Section 2(1) (n) of Advocate Act 1961

State roll” means a roll of advocates prepared and maintained by a State Bar Council under section 17. 

If a person fulfills the conditions required for an admission as an advocate, he may be enrolled as an advocate by the State Bar Council. The Conditions to be fulfilled for being enrolled as an advocate have been stated in Section 24 of the advocate act 1961. An application for an admission as an advocate shall be made in the prescribed form to the State Bar Council within whose jurisdiction the applicant proposed to practice. The State Bar Council  is required to refer every application for admission as an advocate to its enrollment committee, which shall dispose of the application in the prescribed manner. 

Section 16 of Advocate Act 1961

 Senior and other advocates:-

(1) There shall be two classes of advocates, namely, senior advocates and other advocates.

(2) An advocate may, with his consent, be designated as senior advocate if the Supreme Court or a High Court is of opinion that by virtue of his ability standing at the Bar or special knowledge or experience in law he is deserving of such distinction.

(3) Senior advocates shall, in the matter of their practice, be subject to such restrictions as the Bar Council of India may, in the interest of the legal profession, prescribe.

(4)  An advocate of the Supreme Court who was a senior advocate of that Court immediately before the appointed day shall, for the purposes of this section, be deemed to be a senior advocate.

Provided that where any such senior advocate makes an application before the 31st December 1965 to the Bar Council maintaining the roll in which his name has been entered that he does not desire to continue as a senior advocate, the Bar Council may grant the application and the roll shall be altered accordingly

Lets read our constitution preamble

THE CONSTITUTION OF INDIA

WE, THE PEOPLE OF INDIA, having solemnly resolved to constitute India into a

SOVEREIGN SOCIALIST SECULAR DEMOCRATIC REPUBLIC

and to secure to all its citizens:

JUSTICE, social, economic and political;

LIBERTY of thought, expression, belief, faith and worship;

EQUALITY of status and of opportunity;

and to promote among them all

FRATERNITY assuring the dignity of the individual and the unity and integrity of the Nation

IN OUR CONSTITUENT ASSEMBLY this twenty sixth day of November, 1949, do HEREBY ADOPT, ENACT AND GIVE TO OURSELVES THIS CONSTITUTION.

As per constitution of India, we are provided with a Right of Justice, Therefore ideally there should not be any GST on representational services before any court of law.

Therefore as per Notification no 12/2017 central tax rate Point No 45 following exemptions have been granted to the advocates as amended by Notification No 02/2018 Central Tax Rate dated 25th Jan 2018, Notification No 21/2019 Central Tax Rate dated 30th Sep 2019

Notification No 02/2019 central tax rate has added the central govt and others in exemption list.

Notification No 21/2019 central tax rate has changed

20 lakhs (10 lakhs)  figures to

such amount as is exempted from GST Registration,

These changes has been made because the basic exemption list has been changed from 20 lakhs to 40 lakhs as per notification No 10/2019 Central Tax dated 07th March 2019.

Reverse Charge Applicabilities on Advocate Services:-

As per Notification No 13/2017 Central Tax Rate dated 28th June 2017

The above entry of RCM is confusing to the extent that whether only representational services under legal services will be covered or both representational and non representational both will be covered.

Question:-

Will only representational Services be covered under reverse charge or complete legal services ??

As per Circular 27-01-2018-GST, F NO 354/107/2017-TRU dated 04th Jan 2018 (Point No 7)

In case of legal services including representational services provided by an advocate to a business entity, Reverse charge mechanism will be applicable.

So they have extended legal services to both representational as well as non representational services under RCM.

Question

What is the definition of business entity??

Answer:-

Explanation (c) of Notification No 13/2017 Central Tax Rate

“the business entity located in the taxable territory who is

litigant, applicant or petitioner, as the case may be,

shall be treated as the person who receives the legal services for the purpose of this notification.”

Question:-

Will partnership firm of advocates will include LLP as well ??

Answer:-

As per explanation (e) of Notification No 22/2017 central tax rate which amended original Notification No 13/2017 Central Tax rate provided that

A limited liability partnership formed and registered under the provisions of the Limited Liability Partnership Act 2008 shall also be considered as a partnership firm or firm.

Lets understand GST Applicability through this table in various cases